The incoming statistics are getting less bad. I can’t say good yet, but less bad isn't bad either. Factory orders and consumer confidence are both improved and the job loss numbers are less troubling. In August, job losses were milder than expert predictions for the fourth out of the last five months, coming in at 216,000. To me, this is a very important number for both the economy and for real estate. We cannot grow unless we are creating jobs and both residential and commercial real estate are tied closely to people working. All in all, it appears we’ve broken the back of this recession. But what of 2010? Right now, the housing market looks good. Sales and pending have both risen over the past six months. The major question–since we’re still losing jobs–is how many sales have we “borrowed” from the future because of the $8,000 first time buyer tax credit. In the current fiscal situation, and with signs all around us that the recession is abating, with 60 percent of the stimulus package kicking in 2010, and with health care reform absorbing so much public policy bandwidth, it’s probable that the credit will not be renewed when it expires at the end of November. We will then see how much momentum the housing market has on its own. The question for next year will be whether economic recovery will trump the drag of distressed properties. My own call on this is that sales will grow slowly nationwide and prices will still languish, not turning around nationally until the summer.
Ryan S. Lowe