DO YOU TRULY BELIEVE GDP IS GROWING?

By
Real Estate Agent with Coldwell Banker Residential Brokerage

It curls my hair, and I don't have any hair to curl, when the press spins economic news. Yes, it is true that the GDP reported a growth of 1.7% for the 2nd quarter of 2010 which is in fact on the positive side of "centerline"; however THIS GRAPH, obtain from the U.S. Department of Commerce Bureau of Economic Analysis http://www.bea.gov/ clearly demonstrates that our the US economy, as defined by GDP, is trending down.  You make up your own mind about where you think the next trend indicator will land for the 3rd & 4th quarters of 2010.

It is our belief that not until three major pressures are taken out of the equation, will the US economy truly begin to make a meaningful recovery. Those three major pressures are, job creations, meaningful foreclosure prevention and finally a mechanism to repair and address the extraordinary negative equity in residential real estate. According to PR News Wire http://www.prnewswire.com/ SEATTLE, Aug. 9, real estate values continue to fall, reporting that nationally, home owners are suffering with an average of 21% value decline, since the beginning of the economic crisis we are digging out of. The hardest hit areas report more dramatic negative equity conditions. Areas such as Bakersfield CA at 44.6% negative equity, El Centro CA at 57.5% negative equity, Fresno CA at 38.5% negative equity, Sacramento CA at 58.1% negative equity, Las Vegas NV @ 73.9% negative equity, Reno NV at 61.9% negative equity, Phoenix AZ 66.8% negative equity, Tucson AZ at 41% negative equity, Port St. Lucie FL at 55% negative equity, Sarasota FL at negative equity, Tampa FL at 45.3% negative equity, Miami-Fort Lauderdale FL at 44% negative equity, Ann Arbor MI at 33% negative equity and Detroit MI at 31.4% negative equity. Dozens of additional examples can be viewed at Home Value Index.

The bottom line is this. The private sector must be given the tools to create jobs and the banking and mortgage industry must come up with a way to resolve the foreclosure issue and negative equity in residential real estate.

Currently, there is NO exit strategy available to any homeowner who is suffering with negative equity. In over ½ the country, homeowners who are suffering with negative equity have no way to sell their home in the next 10 to 20 years. Does the current congress and administration truly feel that it is appropriate to allow this financial injustice to be suffered upon homeowners who have played by the rules? Is it appropriate that the economic meltdown, caused primarily by the failure of the sub-prime mortgage industry and major players on Wall Street, should strap a homeowner to his home for the next decade, two decades or in some areas of the country as much as three decades? Does it make sense to you, that some form of "exit strategy" for a homeowner should be devised so today's homeowner can sell his home, weather moving up, moving down or relocating? Does it seem JUST to you that homeowners, who have done nothing wrong, played by all the rules, acted responsible with their finances, should NOT be provided a mechanism to exit their home without being required to write a check to their lien holder to cover the negative equity?

Your thoughts are encouraged and even more important, we suggest that you take the time to write your congressman/women and/or senator. You can reach your congressman/woman at http://www.house.gov/ and your senator at http://tinyurl.com/b1lm.

Do you agree that it is every citizens responsibility to force our opinions, experiences and views upon our elected law makers? We hope you do.

Lori & G-II are raked as the Number 1 Short Sale Team in Arizona at Coldwell Banker Residential Brokerage and are ranked 7th in Arizona in overall productivity. You can reach them at ShortSale@AirForceHomeSeller.info

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Rainmaker
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John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

G II - The administration as well as the majority of our elected officials have neither the knowledge nor the willingness to do what is necessary to get our economy back on track.  Solutions will require pain for all of us and will be politically dangerous; I don't yet see the changes coming. Unless WE collectively force politicians to deal with the long-term solutions needed, the economy and the country will continue its slide towards the abyss. 

Oct 09, 2010 03:13 PM #1
Rainer
12,332
G-II Varrato II
Coldwell Banker Residential Brokerage - Luke AFB, AZ

Hi John, Thanks for the comment and you are absolutly correct.

The latest foreclosure debacle by BofA, GMAC, JPMorgan and PNC will, IMHO, most undoubtedly be joined by Wells Fargo, Citi and even Fannie & Freddie. To that point it is our belief that a meaningful and useful solution to the negative equity in residential real estate is one major component that the administration and the treasure refused to address. To add fuel to this fire, is it not interesting that the latest "hot dog" bill from Barney Frank and Chris Dodd (Dodd-Frank Wall Street Reform and Consumer Protection Act) specifically signals out and distances itself from helping folks in the hardest hit areas of the country. If you review the list of eligible states, you will not see, California, Nevada, Florida, Arizona or Michigan, five of the most heavily devastated areas of the country, where homeowners are suffering with record depreciated home values and negative equity. Most of these folks homeowners are growing weary of making payments on their mortgages because they know that, at present, there is no way, in the next decade to two decades or even three decades, that they can ever sell their homes for the mortgage balance. To this point Check out our latest Video Blog at http://tinyurl.com/27no296 to see what I mean.

Oct 11, 2010 11:11 PM #2
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Rainer
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G-II Varrato II

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