So Where Do We Go From Here?
Posted June 26, 2009 9:16 a.m. EDT
Updated June 26, 2009 9:17 a.m. EDT
One step forward, one step back. This seems to be the trend these days in housing, mortgage and economic news. Certainly interest rates have been quite volatile over the past few weeks. Climbing from record lows this spring – rates are still very attractive but some of the glitter is gone from the very enticing low to mid 4% rates we were experiencing just a few weeks ago.
Existing home sales are up – new home sales are down. Foreclosures are still a problem – housing inventories have improved. Companies are beginning to spend again, but the number of people filing for unemployment benefits climbed again last week.
It seems as though we’re stuck in trough of daily economic volatility. What’s going to bring us out of this?
Jobs! We need people getting back to work. With employment returns people’s ability to purchase - and with that ability comes confidence to spend – and by spending on housing, durable goods and other consumer services, we are pumping that ever important liquidity back into the markets.
Good news is that Forbes just ranked Raleigh the #1 city in America that people are relocating to… a very good sign for our economic future and our housing markets. As we’ve mentioned many times, we’re extremely fortunate in the triangle to have mostly side-stepped the complete housing meltdown that was felt in many markets across the US. Kudos to our consumers and realtors who priced homes appropriately, didn’t allow massive overbuilding and didn’t invite a large scale wave of investors to adversely influence the balance of market forces.
So while it does seem that things are moving in the right direction, we must remain careful not to jump on the U.S.S. Exuberance too quickly, as I think we’re still many months away from complete recovery – both on the economic fronts as well as housing. There is simply too much inventory with too few buyers right now – and when you’re sitting on almost double the normal number of vacant houses in the US, it’s going to take quite some time to work through those figures.
Quick note for the video blogs, we’re just waiting on a couple of technical issues to be resolved and we hope to be bringing you video on WRAL.com in the next few weeks. Keep you posted!
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.