Wow. What a couple of weeks. I like most Americans, was barely able to function as our government acted more like my children that my leaders. I haven’t blogged in a while in large part because I just couldn’t muster the energy to do anything beyond my most basic human needs. I ate, slept and breathed this debt crisis. I watched Meet the Press and Face the Nation. I actually took the whole weekend off – and did nothing. In my 21 years of selling real estate I can’t recall every doing that before. Sure, I’ve taken weekends off, though seldom, but I would usually go somewhere with my wife and family. Not this weekend; I did nothing – except I paid my bills. I had to use some ever shrinking savings to do it, but I did it.
Now I am not the kind of guy that feels strongly that our nation should pay its bills and stop borrowing. I would consider that “switching horses mid stream”, and not a good idea at this time. However, I do agree that a plan for debt reduction needs to be well thought out, balanced and then implemented. And I am not climbing on a soap box here and saying, ” I paid my bills and so should you”; not at all. Rather, I am just relieved this debacle in Washington is over, at least for the time being, so we can get back to the business of living, trading, loving and growing our economy. Being paralyzed over government ineptitude through inaction, is no way to accomplish any of those things.
A lot of data came out over the past couple weeks. Conflicting data. Confusing data. Case-Shiller reported mixed numbers: Prices up, month over month, but down year over year. They referred to market conditions as the “bounce-along-the-bottom scenario”. The US Census Bureau reported home ownership has declined to 1998 levels of approximately 65.9%. Economists front the Center of Economic Research and Forecasting from Cal Lutheran University here in Thousand Oaks, (formally of UC Santa Barbara), have told me the level we need to get to, to call a bottom was about 65%, thus signaling that we are close to a bottom in housing.
Bottom? Is it really possible? Again, let me refer to Case-Shiller: (We need to see) “Sustained increases in home prices over several months and better annual results… before we can confirm (a) real estate market recovery.” Perhaps not great news, but not terrible either. Further, foreclosure tracking service Realty Trac reports foreclosures are down 29% year over year across the nation while Core Logic reports, “Stabilizing nondistressed home prices, a declining shadow inventory and stronger foreclosure auctions should lead to lower distressed sales and less downward pressure on prices”.
If you’ve been following any of these economic sources you know they have been very sobering in their assessments of the nation’s housing markets. Yet what I read here is a growing consensus that housing is improving, albeit slowly, and that we may truly be nearing the bottom. But you probably missed it. So did pretty much everyone. The most damaging effect the Debt Ceiling debacle has had, is that it focused all our attention to the nation’s debt service and not on the positive threads in the fabric within our economy. It froze everything. It set back a struggling economy by creating an environment of insecurity and uncertainty – neither of which are conducive to hiring or purchasing or investing in much of anything except maybe gold. This is the cost of our government’s failure to recognize what kind of leadership we as a country and as an economy, require. By leading us down the debilitating path of uncertainty, Congress has single handily set back our hopes of economic recovery months and may have even pushed us back into recession. If we are lucky, it will only mean greater pain and suffering for a short while, but if we don’t get back to business quickly, we may look back at July 2011 as the month Congress brought the world’s greatest economy to its knees.