State of Housing in the US….Addressed!

Hey Peachtree City!  After listening to the President’s State of the Union address, I sat down and pondered about the actual state of the nation’s housing situation….or at least how I saw things from my porch.  Come on folks, is it just me or are there a number of other like-minded individuals that are of the opinion now that if Washington sneezes we are all going to catch a cold?  Alright, at least a sniffle.  I just did not seem to hear anything specifically related to doing something substantial that would give the housing & mortgage industries some much needed traction.   

Okay, you can count the stimulus if you must and it has accounted for an increase in home sales…but has it just helped to keep the economy on life support and what is or will be the real economic impact or repercussion?  Hmmm…Only time will tell.  Yeah, folks it’s easy to get diverted by listening to all the pontification from the press & media about what should be done, who is to blame, all the buffoonery, and out of control deficit spending.   Heck…to me there is enough blame to go around on both sides of the floor in DC.  

Frankly, I think we all have to step up and not just count on the government to fix our problems and provide all the answers.  Besides, with all the intellectual prowess in our country, does it or should it really matter who fixes the problem?   I just have seen so many folks from all walks of life that are hurting.  In fact, we all have been affected in one way or another.  It just seems so surreal! Ironically, all this chicanery seems to essentially have all the elements of a Shakespearean tragedy.  Is not home-ownership not a part of the American dream?  So tell me why has the “Dream” become a nightmare for so many?       

 Okay, go ahead and vent if you must!  We can blame the banks for greed and the bubble as well as the former administration for taking us from a $20.4 trillion dollar deficit to a $56.4 trillion dollar deficit.  We can throw Tim Geithner under the bus for paying off AIG and criticize Ben Bernanke for saving Wall Street and not Main Street.  But what about all of us living in the here and now!  Hello….is anyone even listening? 

First, let’s examine the current financial markets.  The Fed stated that there would be no rise in short term interest rates.  Good news right?  Well, maybe….but what signal does this send?  Then wham….it hit me just like the V8 commercial.  The Feds are not convinced that the economy is recovering or recovered enough.  Additionally, if short term rates went up…so accordingly would 10 year rates and concurrently….so would mortgage rates.  Of course, an increase in mortgage rates would be the kiss of death to many homeowners just barely making it now. 

So what is the state housing in the US?  Well it depends on who you ask.  As for me, I’m pretty optimistic about 2010 but here are the statistical facts.  Nationally, home sales fell another 7.6% in December after falling 11.35% in November.  Here is Georgia our housing industry had been down for 13 straight quarters, but the 4^th quarter stats for 2009 may actually reveal a double-digit year-to-tear increase for all single family homes according to Steve Palm at the First Multiple Listing Service (FMLS).    

The average close price in Georgia for a single family home attached in November, 2009 was $147,347.  This is down 8.5% from November 2008 and the 24^th consecutive year-to-year monthly average decline.  However, inventory has dropped and the December numbers will probably find us back to 2005 inventory levels.  Yes…this means that for the first time since April 2007 we have dropped below 10 month supply levels.  Of course, we still have a ways to go before we reach normal 6.5 to 7.5 month supply levels. 

That’s positive news for Georgia and disappointing stats nationally!  The next 2-3 quarters will be critical for Georgia and the nation especially with the threat of inflation becoming a reality by the end of 2010.  The U.S. Commerce Dept. stated that homes sales for December were the lowest ever since stats were kept!  What was consistant here in Georgia with the national numbers was the down trend of home prices.  In Georgia,  the average price of a home slipping 3.6%. 

But look at the bright side…homes are becoming truly affordable now.  Hopefully we can all continue to get loans!