What Will Cause the Housing Market To Recover (And it will)

We all know where we are today in terms of equity losses and real estate values being in the tank. Each state has it's own issues and every county is a micro economy with its own economic situation. As the saying goes, its a local business.

Although we will all recover eventually, some are recovering and growing now. Others, due to natural and other resources will recover quicker and some will lag behind for quite some time.  We will recover as a nation, and hopefully we will emerge stronger and with a cleaner environment for our children. Below are a couple of really BIG reasons we will recover.

1. POPULATION INCREASE The US Census Bureau predicts that the population increases about 10% every 10 years. So if we have a little over 300.000,000 million now, we will have a little over 330.000.000  in 10 years. Add in immigration and we will have more. Those people will need homes.  Isn't life expectancy also increasing? So won't people be living longer, healthier and more active lives? Won't they want to continue to live on their own, probably in Adult communities where they play like children again?

2. CLEAN ENERGY AND TECHNOLOGY MANUFACTURING There is so much happening here it hard to keep up, but as an example, two clean energy manufacturers are spending over 1 billion dollars each now to build manufacturing plants in Tennessee for creating solar products to employ 4000 people each. Hello, job creation that we didn't have before. Maybe one reason that solar has been expensive in the past will now change due to the supply of polycrystalline silicon, a much needed product for solar energy. Congrats to Tennessee! They attracted the German manufacturer with low utilities from the Tennessee Valley Authority, and maybe their Southern Hospitality too. If other states want to attract this type of manufacturing, they need to go back to the drawing board. It's out there and they are going to go somewhere in the US. We have a great natural resource for this energy all across the southern US.

3. HEALTH CARE and I do mean Health Care, not sickness care. Our generation has the potential to become healthier than any other generation before us, and that will create jobs. The need will be fed from our population increase, and from better products.

4. HOME GROWN NUTRITION Many are now buying only locally grown or at least US grown foods, especially with all the knowledge of products from other countries not being regulated. Organic ia even better, but still expensive. Hopefully this will change with larger availability and demand. As a nation, we spend less on our food than other nations, and while it is affordable, we are now seeing that more affordable is not cheaper in the long run. More on this topic at another time. But jobs here.

5. Construction will be needed again. Construction of new homes. Otherwise, the hedge fund investors wouldn't be buying developed lots now at bargain prices. Yes, they are now buying. They are also already making deals with large builders to sell them to for future building, at least the ones that stashed some cash. The new construction will need new building materials and the cycle will begin again. This time it will happen with better materials, and a new type of home product will be created. A more sustainable home, probably a bit smaller, but with great technology. Many of the older homes will be retrofitted with clean energy products, manufacturing in the United States.

In conclusion, we will probably not have the rapid appreciation that we saw due to the insanity of the complex and bad sense mortgage products that were fueling the speculative building market that occured in the first decade of our new century, but we will see housing stabilize and eventually we will see the unemployed go back to work. And this writer thinks we will have a better world along with it. I don't think we should settle for less.