Although the Great Recession officially ended in June 2009, there is a loose consensus that housing is about to recover or, indeed, is already recovering.
It’s hard to know where we are. None of the statistical information from a variety of sources is particularly helpful. Anecdotal information is even worse.
When it comes to Manhattan’s housing situation, nothing could be easier than to find rosy predictions–most recently in the New York Times, where various executives were quoted as celebrating a boost in business.
Yet, when I speak to brokers at their open houses, I get a range of reports. Some brokers honestly say that they’re still waiting for buyers to show up and make reasonable offers. Others, also perhaps honestly, say buyers are back.
I know I’m seeing the tips of a sea of icebergs, but I’m guessing that both camps are correct. Everything depends on the attractive pricing of appealing properties.
Of course, numerous other variables come into play: Location, condition, consumer confidence, Wall street indices, employment, price level, season and so on.
Analysts far wiser and better educated in economics than me are all over the lot in their assessments, remedies and predictions of the nation’s housing market, which, as a whole appears to be much worse than the Big Apple’s. Theirs are the comments that got me thinking.
For example, a long Bloomberg piece suggests that the slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market.
The estimable blog, CalculatedRisk also weighed in recently, identifying what it dubbed two “key” problems for the housing market.
And economist Robert J. Samuelson warned in an op-ed piece in the Washington Post that failed housing policies should be discarded, but only in ideal world. Until then, he counseled, “we need to make haste slowly.”
President Obama grappled with the issue during a town-hall style meeting yesterday, giving the impression in his answer to a question from CNBC that the government was damned if it did anything and damned if it didn’t, according to the Wall Street Journal. Said the chief executive:
I guess my job as President is to think about those families that are losing their home not as some abstract numbers. I mean, these are real people who worked really hard for that house. And we think it’s very important that speculators, people who are just trying to flip condos, et cetera, that they’re not getting help.
We think it’s very important to acknowledge that some people just bought too much house; they couldn’t afford it. And it’s not fair for the rest of us to have to subsidize them because of bad judgments and mistakes that they made.
On the other hand, we also think it’s important to recognize that if you’ve got communities where you’ve got — every other house is foreclosed, that that’s bad for the economy as a whole.
What’s the the government to do?
It is, Obama averred, a “tough decision.”
I’ve been thinking that he’s correct on this point: There is no way to avoid trade-offs. Moreover, there is not much that the government can do anyway–even if the government were of one, to put it generously, mind.
Tomorrow: Details and Murmurs of My Own Mind
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022
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