Everyone is asking “Is the U.S Economic Recovery on Track?” I would assert that the answer to that question will only be determined in time, however we are seeing some positive sign of recovery.
One thing that seems to be driving consumer confidence is the $8,000 first time home buyer tax credit that is set to expire November, 30 2009. However, we are currently waiting to see if this tax credit will be extended and/or expanded. If this credit is extended into late 2010 I believe that we will see a more steady improvement towards total economic recovery.
The housing industry is a key driver of our economy. If we can get inventory and days on market down homes will start to appreciating and then we will be able to see recovery in other areas. According to a study done by the National Association of REALTORS, for every house that is sold 1 job is created and $66,000 goes directly back into the economy.
Currently, one area of need in the housing industry is the “move up buyer” these are people that have owned their home for a few years and have some amount of equity but don’t or can’t sell because they will lose money. There isn’t any incentive for them to sell and if they sell now they risk losing more money then they have in the home. It has been proposed that if the government expands the tax credit to all home owners and home buyers then we will see the “move up buyer” come into the market place and that will fuel the recovery of the real estate market.
Reuters.com recently published a story about the U.S. economic recovery. Here are some of the key points in the story:
- “The U.S. economy is firmly poised for a recovery from its deep recession but growth may be moderate and the job market will not revive immediately, senior White House aide Lawrence Summers predicted on Wednesday.”
- “On the economy, Summers said the $787 billion stimulus package and inventory rebuilding by businesses were among the “dominant drivers” lifting the economy.”
- “It will be some time before unemployment starts to decline. Once it declines it will take a long time to return to normal levels, given how elevated it is…The jobless rate is now at a 26-year high of 9.8 percent.”
- “Most private economists think the recession, which began in December 2007, ended in the third quarter. But there is much disagreement about the path to recovery.”
- “Some see above-average growth continuing through next year, arguing that deep recessions are typically followed by powerful recoveries, helped along by pent-up demand as consumers and companies resume spending.”
As you can see this is positive news and that only benefits the local housing market. As we enter into the new year I think we will see a steady improvement in our real estate market. It is not going to be rapid turn around or double digit appreciation, but it will be slow and stead which is always more stable in the long run.
Let’s take a look at what happened in our local county this past week:
With the holidays around the corner and the weather cooling off we saw a significant slow in showings this past week. However, we did see more inventory come on our market in Loveland and Fort Collins. Of these homes that were new to our market we had reports of multiple offers. We only see multiple offers when the property is priced right in relation to its condition and location.
We may see a slowing down for the next couple months but I am confident that 2010 is going to be better.
Keep coming back for more updates.
Leslie