I’ve been talking about this on & off over the past several months – the media’s fascination with bad news and making it sound like the bottom has fallen out of the housing market, and now the ecomomy in general. No doubt there is a lot of anxiety and uncertainity about the economy, the hjousing market, unemployment, etc, etc…and some parts of the country have been hard hit in multiple sectors. As quoted in the linked article,
“We’re over-reacting to the recession word,” Dow Chemical Chairman and CEO Andrew Liveris told CNBC. “Lots of people get together and talk to each other and people believe the psychology.”
“It feeds on itself,” says Jim Awad, chairman of JW Stewart Asset Management. “You can’t go home every night and hear this and then go out and hire someone or buy a car.”
“The economy is still sorting itself through,” Liveris told CNBC. “I wouldn’t do the ‘Chicken Little’ thing.”
As I discuss with my real estate clients, we might be bordering on some challenging times, but I also think there are some great signs for a turnaround, or at least a stabilization. Interest rates are low, housing prices in Chicago are stable to decreasing and there are a lot of people looking to buy a home.
Even the federal government is involved in trying to provide some help and relief. The Hope Now proposal is a work in progress that might help. Here’s how it would work:Under this proposal, the government would allocate as much as $20 billion up front. It would use those funds to buy up mortgages from investors in a reverse-auction process, at prices below the face value of the loans. In a reverse auction, sellers compete against one another, slashing prices until a buyer – in this case the government – says yes to a deal. Toread the full story, click here
On this front, I’m curious, what do you think about the subprime debacle. Post your comments whether you’re for or against federal intervention and to what extent.
I look forward to seeing the responses…
