First of all, we apologize for using the term “housing market” since we spend half our time explaining how there is no such thing as a monolithic national housing market but rather a loose collection smaller local markets. When considering that reality, it’s dangerous to make generalizations about how the housing market is going here or there.
Having said that, the most recent Standard & Poor’s / Case-Shiller 20 city home price index shows a 3.2% July gain when compared to one year ago. Good news, right? Maybe not. Digging further into the report shows 12 index cities with gains, though the rate slowed from the month before. 7 cities declined from the month before. With government tax credits for home buyers fading in the rear view mirror and the pace of foreclosures, weak demand, and lack of buyer interest increasing, we’re hazarding a guess to say the worst is not behind us…
…unless you happen to be an income property investor with money to spend now or in the future. In markets where prices are already weak, expect them to keep tumbling for a while, a terrible scenario for home owners but not such a bad deal for a landlord who has the prospect of monthly rent paid by a tenant to pay the mortgage and offset any temporary depreciation in asset value.
Overall, we at The Creating Wealth Show a’re going to hazard a guess and say that the Obama administration has not magically healed everything with a wave of the currency printing press wand. In fact, it looks like the grimness will be continuing for a while for those barely able to make house payments now or looking at the belly of an upside down mortgage. All we can say is, “Good luck!” As long as the present powers-that-be are in place, you’re probably going to need it.
The housing market is dead. Long live the housing market!
The Creating Wealth Team
Flickr / Chris Gaw
