A key factor in indicating the turning point of the economy from  the current  recession will be the recovery of the housing market. As we head in to 2009 we will continue to see corporations become “efficient” aka layoff additional workers adding to the unemployment rate. Job losses are projected by the NAR to continue for another 6-9 months. This will impact both residential and commercial markets until job loss is curtailed. With so many incentives to buyers to purchase real estate ($7500 tax credit, mortgage rates at all time lows, lower market pricing, etc.),consumer confidence has dwindle in the last quarter of 2008,adding significant stock losses and over #2 trillion of housing value lost from peak market points, has sidelined many potential buyers.

To put a historical perspective to the current economy and housing market, the last recession in the early 2000’s the housing market continued to see increased sales. The recession of the 1990’s, housing only saw moderate declines in sales.

If there is a positive side of this current economy, it is the fact that housing remains very affordable, achieving levels unseen since the 70’s.
An overabundance of housing inventory and continued foreclosure filings will continue to hold prices stagnant, until such factors as consumer confidence and unemployment turn the corner in this economy.

With a new potential housing stimulus package for 2009, coupled with current market incentives to purchase a home, a decrease in unemployment or an increase in consumer confidence could be the catalyst to housing recovery.

For more information regarding the housing market or to find related articles, please check out my website at www.cpaneeds.com.

Respectfully,

Michael Dolezal, CPA, Realtor©

Tags: Economy, Housing, Real Estate