Housing Industry -- The Economy's Ugly Step-child

By
Industry Observer

My personal resources are split almost equally between real estate and equity investing.  In my research, it's getting progressively more difficult to find any reference among economists and analysts to housing as a significant component of our national economy.

It seems that housing and the people who have been destroyed by its crash are expendable.  The carpenters and plumbers and excavators and electricians are apparently doing just fine bagging groceries and driving school buses.  The entire generation of folks who used their inflated home equity for cash out financing are lost, and we are trying desperately to forget them. 

Yes, many folks used their homes as ATM's to buy stuff they could have lived better without.  Yes, they made some poor decisions.  Yes, they were the consumers who grew our economy way beyond its logical limits.  Yes, many of them will never recover from their mistakes.  They are the forgotten, or let's try to forget them, generation. 

There were very few people who expected the real estate crash, and fewer who took action to defend themselves from substantial loss.  The degree of loss is mostly the result of where one was in their life's progress than good planning.  It was either good fortune or bad fortune.  Those of us who have avoided financial devastation probably have to admit that fortune was the main driver.

Anyway, the situation is what it has become, and now we have a generation, more or less, that is never going to recover from the housing crash.  They have neither the time, nor the resources to pull themselves back to respectability.

Watch CNBC or one of the other financial channels.  Count the times anyone mentions housing and the need to make a commitment to bring housing back on line.  I guarantee that you will not need to take your shoes off to keep tally.  As a matter of fact, I doubt that a few missing fingers will hinder the count.

Will we put America back to work without significant gains in the housing industry?  Yes, we will. Next time you're in the grocery store or Home Depot, ask the bagger or the stocker what they did before they got their current job.  You probably won't be surprised when they tell you that they were a tradesman in the building industry, or maybe a real estate professional.

Yes, the housing industry is the ugly step-child of the nation's economy.  America is trying to forget that there is a generation of homeowners and tradesmen who will never be able to contribute significantly to our economy again.

 

 

 

Posted by

 Mike Carlier  Lakeville, MN

 

612-916-3033

 

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Rainmaker
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Mary Borth
Bloomington-Normal, IL
LuxeHomesBN.com

So nice to see something so relevant and timely being posted on AR. I hope this provokes as much discussion as it deserves. It is sad to think of all the people who have been affected (and, who hasn't been - I don't think anyone has been left unscathed).

I am so defensive about my industry now and I hope something can be done to bring it back.

Thanks again for taking the time to post this.

Mar 01, 2012 10:01 AM #1
Rainmaker
522,372
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Mary, thank you for reading this post.  The industry is recovering, but it is going to be a slow recovery, and it will be many years before the building trades are substantially recovered.  In the meantime,  the nation will lock a large part of a generation of homeowners and home buildilding participants in a virtual closet, hoping that they will remain out of sight, out of mind.

Mar 01, 2012 10:19 PM #2
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Your posts on this subject are very well thought out.  I never actually thought in terms of some that are never going to recover from the housing crash, and as depressing as it is, you are absolutely right.

Mar 02, 2012 01:31 AM #3
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2,803,708
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Mike - You're absolutley right about this. The true economic cost of the housing crash has to not only take into account all of the wealth embodied in real estate values (even though that was mostly potential wealth) but the value of the skills and expertise that have been lost to less demanding, and less productive, economic use. That's also the human cost, and while it's hard to calculate, you can be sure that it has had, and will continue to have, an enormous impact on our future recovery.

Mar 02, 2012 01:49 AM #4
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Toni Weidman
Sailwinds Realty - Trinity, FL
20+ Years Selling Homes in New Port Richey, FL

Mike this is an excellent post. It's almost as if the plight of hundreds of thousands of "real estate" related folks does not appear on any radar. For the past 5 years, I've waited for agents/brokers/title companies to be mentioned as a loss but no-one seems to care about any of those either. I'm suggesting.

Mar 02, 2012 02:18 AM #5
Rainmaker
522,372
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Eventually, as they grow into responsible adulthood, the number of new homeowners will increase and develop equity in their homes.  Eventually, they will grow their equity and their family housing needs and move up to better homes.  As their numbers increase, the housing industry will rebuild its infrastructure and again become a significant contributor to our nation's economy. 

The generation affected negatively by the housing crash will continue to pay for its sins.  What sins?  The sin of being in the wrong place in the wrong time, the sin of doing what the majority of homeowners had been doing since consumer credit interest was almost eliminated from tax deductibility.  Of course, the almost was the gaping hole left in the 80's when home equity lines of credit became the attractive deductible way to reduce the cost of borrowing money to buy a new car or boat, or to finance your kids' college tuition.  The wrong place in the wrong time tripped up lots of folks who will be best left forgotten until they depart this earth.  They just don't fit in to any leader's personal advancement strategy. 

 

Mar 02, 2012 10:32 PM #6
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Rainmaker
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Mike Carlier

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