The daily newspaper here in Wichita yesterday brazenly reported that the recession may be soon over sighting the most recent news about housing starts and and housing in general. Many economists and analysts believe the recovery rests on the shoulders of the housing industry. Great! No more worries and we can now get back to the business of commerce.
It is true that the US turned in some really impressive numbers concerning housing lately. Most recently housing starts were up. There's lots of buying activity out there considering the state of the rest of the economy. The question is what is driving it.
Money is what's driving it. Government money to be exact. As most everyone knows by now the $8000 tax credit that the Obama administration has enacted for first time homebuyers ends Dec. 1st. First time home buyers have to be closed no later than Nov.30.
It takes 4 or 5 sometimes 6 months on average to build a house these days. Of course the smaller the home the faster it goes up. That leaves about 5-6 months from when the last stats began to be gathered. Just enough time to put a new house.
Resale stats may still stay strong as we finish out the year, at least until the middle of October or so. A contract signed at the end of October will be pushing the limits to get closed by November 30, especially with all the new changes that have come about recently.
So, is the recession ending soon? That is the question. No one really knows what's going to happen to the residential real estate market once the incentives to buy dry up. Will people continue to buy? Who knows. The best that can happen is for the tax credits to be extended in order to keep this momentum going and to build on it.
The economy is counting on the real estate industry. So how do feel now. Empowered?