Both must wait until the other has passed
There has been a report floating around the internet for years that says there is a law, usually reputed to be in Washington, that two trains coming to a crossing must both wait until the other has passed. I've seen variations of this absurdity. Once I found a rural intersection with a four-way yield, about the same as the train law.
Another absurdity is the rhetoric about the housing industry and the economy, unemployment levels to be more specific. The story goes like this, "Housing will return to normal when the economy recovers and there are fewer unemployed people." Of course there is the other story, "Unemployment levels and the economy will only return to normal when the housing industry recovers." Apparently, both must wait until the other has passed.
I guess we all feel that we have some insight into what must be done before there is improvement, and there is an element of truth in most folks' ideas about housing and/or the economy and high unemployment levels. Here are a few of my thoughts:
- The inventory surplus in housing is due to both the aging of our population and the tendency for extended families to consolidate their living arrangements. It is a symptom of a poor economy with a high level of unemployment.
- It will be four to ten years before there is a noticeable trend toward higher home prices, and they will likely be in line with inflation, not beyond that.
- Most of the excess unemployment is the result of the continued housing depression, with construction work and supply line jobs gone for the long term.
- Walkaways can be reduced if there are more people living in homes they like and want to continue to call home.
- There has been virtually nothing creative occur in the real estate sales, home building, lending or government to attempt to shorten the duration of the depression.
- If there is ever an action taken that helps the housing depression, it will have to involve people who are currently home owners with the ability to make a higher monthly payment. Either portable underwater debt or incentives to accelerate paydown of debt, or both will contribute to housing recovery.