There's no question that the property crash of a few years ago has put a damper on the whole economy. It lead straight to many lost jobs abd some industries, like construction, have practically been ruined by the issues in the housing market.
So till people start buying houses again plenty of other parts of the economy may continue to be lethargic.
After all , there are numerous industries involved in the housing market. Not only real-estate related companies like home sellers and mortgage firms, but construction-related businesses like home builders, plumbers, floor installers and painters. Also enterprises that service those industries like home repair stores or furniture and appliance stores.
Yes there are a large amount of related companies waiting for the housing market to recover.
So the big question is… When will the property market get better?
Of course, it’s all difficult to predict. So many things must change. And yes the economy in total is perhaps the big culprit.
Businesses will not hire until they feel like they have consumers ready to buy. Customers can’t buy till they have jobs and cash or at the very least the confidence that extra cash is on the way.
So one part of the economy is waiting for another which is waiting for another. It's a viscous cycle.
And in some ways, it’s all psychological. Like somebody said… “We have nothing to fear but fear itself.”
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Yes a down economy is virtually a self-fulfilling prophesy. Till people feel more confident they don't take chances on enormous purchases, like homes or vehicles, or take holidays or perhaps buy large appliances like TVs. Everyone cuts back on spending, which naturally just makes things worse because it means enterprises don’t hire, or worse, go into bankruptcy. Which naturally means fewer jobs.
And round and round we go.
So everything is related and basically due to some other part of the economy breaking down.
Take the housing market…
With housing prices so low, many folks do not really wish to sell because they believe they are losing money matched against what their houses were worth on paper one or two years ago. But that implies fewer homes are on the market. And that suggests less sales can happen and that eventually means fewer sales.
At the moment there are less homes available for sale than there's been in numerous years. Available homes for sale actually went down over 25% in January of 2013 matched against Jan of 2012. And although real estate sales and prices were high in January of 2013, they may have been much better if there were more houses on the market.
And with the lower housing prices, people with underwater homes are essentially doing short sales to get out from under a bad situation. This keeps home prices low too. Although selling short sales may be beneficial in the short run to get the home market past the foreclosure crisis we are still experiencing.
So that you can see, there’s plenty of reasons why the home market has been so slow to recover. It’s still about a perfect tempest of Problems that have to be overcome before we see things back to normal with a robust housing market and overall economy.
So it returns to being patient and maybe taking a chance on buying a little something, simply to help the economy.
Rick Hart is an internet business consultant. He provides tools for short sale lawyers in Tampa that help with loan modifications, short sales and foreclosures.