Hey, folks!
Now begins the gray time of the year in Chicago. No holidays to look forward to. No novelty in the first snowfall of the season.
Just another four months of cold and snowy weather!
Well - keep the climate controls adjusted inside of you - and you'll be OK! Heck, we've done pretty well thus far . . . yes?
All things, as they say, must come to an end!
The good things end - the incredible Bull Real Estate Market, which, day by day, becomes a more distant memory. Low gas prices. Reasonable costs for groceries, and health care.
And so do the bad things. Although the U.S. Economy continues to struggle, many predict the housing market will recover soon, as will the nation's bleak employment picture. Consumer spending will improve, as will productivity.
But what happens when some of those U.S. Government Intervention Programs that may have helped us get out of this mess - although some debate their benefit - come to an end?
I speak of things like big cash infusions to major financial institutions, First Time and Repeat Home Buyer Income Tax Incentives, and massive buying by the Fed of Mortgage Backed Securities to help drive down Interest Rates.
When they end, will the economy again sputter, needing oxygen almost immediately? Or, like a young bird pushed out of the nest, will it begin to soar - although, perhaps at first, hesitatingly?
On Wall Street, stocks skyrocketed 66% from their March lows. Some corporate profits are beginning to rise. Mortgage Interest Rates have been near record lows, although they have edged upward over the past few weeks. In many market areas, sales of real estate - especially low-cost, distressed properties, has begun to take off once again.
But please, folks. Flip over the hit record. Notice on Side B over 10% unemployment nationally - roughly 11% here in Chicago and across IL. Tumbling Chicago Home and Condo Prices, in part fueled by continued-staggering levels of foreclosures and pre-foreclosures. Still-high gasoline prices. And, moribund automobile sales, despite the much-ballyhooed "Cash For Clunkers" program last summer.
As reported by Gail MarksJarvis in the December 30th Edition of the Chicago Tribune, some strategists on Wall Street are predicting as much as a 30% correction in stock prices by mid-year. If the economic recovery becomes sluggish again, and the prediction of higher interest rates come true late in the year, such a move could put the breaks on investment, both by home buyers, and small businesses.
At mid-year in 2010, the Fed First Time Homebuyer $8,000 Tax Credit Program, along with a companion program providing a $6,500 Credit to certain Repeat Buyers , will likely end. Will that derail any housing market recovery?
If the stock market suffers, investors will likely park their money in tried-and-true companies - those staple items not as impacted by a recessionary economy. Potential homebuyers may sit on the sidelines waiting for better times, and a more promising jobs picture. A new, larger home - it might stay a luxury out of reach for too many in the coming year. Homesellers - they might wait until prices begin to edge up once again, at a time undetermined.
Taken together, however, all of these factors - the equity markets, interest rates, unemployment figures - will boost, or stymie, housing market recovery, depending on how they fall.
Indeed, how will the Housing Market, and the U.S. Economy in general, fare in light of a weaning off from Fed help? No one can know for sure!
But it is making a lot of folks understandably nervous!
Please read our post today via BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO
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