As Recession Abates Worries Continue
Many economists think that The Great Recession started in 2007 and ended in 2009, though well over two years later people around the world are still suffering from the aftermath. Interestingly, retail sales for this holiday shopping season appear to be the strongest in three years – that’s three years, even before the recent recession – but home prices continue to decline. Economists find these two indicators, home prices and retail receipts, to be really useful indicators of the true state of the economy, so taken together these facts point to continuing uncertainty.
Companies are actually awash in record profits, but so far are not hiring. Interest rates are incredibly low but credit lines remain tight. Of course, who gives out hundreds of dollars right now – or, even, take it on – with all the uncertainty? It’s quite a conundrum, since nobody wants to take those crucial first steps that somebody will have to eventually – a great many somebodys, actually.
Only twenty-one thousand homes were sold nationwide this past November, a record low for just one month. Savvy shoppers, however, can take advantage of these conditions, which have lead to low prices throughout the entire real estate market, even for properties in New York City.
It’s a singular situation that even professionals such as real estate developer Isaac Toussie have not seen before, where price declines seem to discourage sales!
The situation is much, much worse in cities such as Cleveland, Minneapolis, and even Dallas, darlings of the 1990s.
Ultimately, nothing will change on the real estate front without dramatic improvements where jobs are concerned. But without real estate improving first, setting off a chain reaction of new purchases for major items, where will the jobs come from?
It’s a vicious chicken-or-egg cycle.
And so many economists argue that the government needs to step in, bringing its full weight to bear on a situation that isn’t just another cyclical downturn.