I’ve gone on record (http://www.theshortsaleminute.com) many times saying that short sales will continue to increase (especially in Temecula Valley and the greater Riverside area) and will probably be with us for another two to three years. Of course I don’t have a crystal ball and cannot say for sure, but this is my prediction. Why? One main reason is because of the jobless rate. Areas such as Riverside County that experienced huge decreases in home equity combined with record unemployment rates (currently 14%) have created the perfect storm. If you’re unemployed I highly doubt your unemployment benefits will cover your mortgage payment and if they do, for how long?
I read an article on Yahoo finance last week (http://finance.yahoo.com/news/New-jobless-claims-up-sharply-apf-1639241920.html?x=0) that showed jobless claims rose sharply as layoffs persist. Is there an end in sight? Not according to this article and many economists out there, at least not a nearsighted end. Jennifer Lee, an economist with BMO Capital Markets said, “We’ve definitely seen the economic recovery hit a wall.” Kevin Logan, an economist with HSBC Securities, said many economists have been expecting claims (jobless) to fall below 450,00 for several weeks now. “The wait is getting longer and longer…As each week goes by, doubts about the underlying strength of the economic expansion grow.”
Layoffs are one of the biggest concerns with our recovery. Last week, the Wynn Resorts laid off more than 260 workers in two of its Las Vegas casino hotels. Companies are looking for ways to save money and unfortunately one way is to eliminate jobs.
Currently, there are an estimated 9.7 million people receiving unemployment insurance benefits in the week ending May 29…the most recent data available.
So, what about the private sector? In April, 2010 it’s estimated 218,000 jobs had been created. In May, 2010, only 41,000 private-sector jobs were created.
As long as we continue to add fuel (unemployed homeowners) to the fire (housing bubble) we will continue to see Short Sales dominate the Real Estate Market.
This is Ryan Smith from Temecula, CA signing off until next time……
P.S.
If you or anyone you know are experiencing a financial hardship and cannot keep up with your mortgage payments or are already behind, you need to visit my site and request your free book. This book will show you how You CAN Sell Your Home For Less Than You Owe The Bank, Avoid Foreclosure, Save Your Credit And Get Your Lender To Pay ALL Of The Sales Costs…FOR FREE. http://www.dontforeclose411.com
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