Many who study economics contend that our economy can not recover until housing and construction does. That makes sense in hindsight of past periods and previous business cycles and recessions, I as the economic analyst for a think tank which happens to operate online, I find arguing this point of content fruitless. Surely the housing and construction markets matter for economic recovery.
With that said, we should be asking ourselves exactly how things are doing in this fourth quarter of 2012. Well, let's talk about that, and let's discuss the “green real estate sector” which was going great guns before the collapse and looked like such promise as the Obama Administration came into office.
Now then, The Wall Street Journal had an interesting article on November 28, 2012 titled “Homes Boost Economy – Real Estate, Once a Drag on Growth, Reverses Course as other Sectors Tail Off,” by Conor Dougherty, Nick Timiraos, and Neil Shah which noted that “An improving housing market is buoying consumer's spirits and spurring spending.”
The increase in home appreciation is doing well this year, up some 7% nationwide, some areas it's very robust, which is a good sign that old inventory is selling and things are moving ahead, Goldman Sachs expects this to continue, but I don ' t in fact, I disagree with their summation and forward looking trend lines. Why you ask?
Well, consider if you will that we could slip back into recession and if we cut the defense industry and military much we could see huge job losses, more foreclosures, and more inventory on the market which would slow sales of existing homes as well as new homes being built, adding to recent construction job hires being laid off again. Next, we have some real challenges with FHA and recent figures indicated $ 19 Billion in the hole with future predictions of $ 97 Billion if these trends continue. Maybe they will not if you buy into Goldman Sachs' estimates, which I do not. Why you ask?
You sure ask a lot of question and yes, that is wise, I am wondering why no one else is at this point because starting 2013 there will be a new ObamaCare tax on every home sold, new or existing of 3.5% and that money has to come from somewhere right? So, it will cut into this uptick in home sales, and it will make it tougher for people to get loans. What does this mean for the green real estate revolution?
It means everything is once again put on hold until we get a real housing recovery, and this is not it, the fourth quarter of 2012 was purely a small window of opportunity which some may have taken advantage of but it will be over soon. So please consider all this and think on it.