Pretend you're the President of a company and you're going to present a plan that saves the company.
Do you feel any pressure- knowing the obstacles are so large?
Multiply that by millions.
President Obama is facing challenges unlike any others in my lifetime.
There's an ongoing war and every industry in America is facing financial difficulties.
Many say that the root of the problem is housing.
So... where do you go to pitch your plan?
How about Phoenix.
In a city named for a bird that rises from the ashes there are glimpses of the dismall...
.... and there are glimpses of hope.
As Dickens said, "the best of times" and "the worst of times."
Single family home sales are up 49%. (Arizona Republic, Feb 13, 2009, D1)
Yet foreclosures are climbing.
The median priced home in the valley In January of 2008 was $243k.
Now it's $146k.
That's a 44% drop.
(Arizona Republic, Feb 13, 2009, D4)
The Stimulus package has been debated ad-nauseum.
I'm not going to deal with that here.
I'm in real estate so I have these concerns:
- Stemming the downward spiral in home pricing.
- Decreasing unemployment.
- Curbing the foreclosures.
To the last point, three banks have decided to suspend foreclosures for the immediate future. Bank of America, Citicorp and JP Morgan Chase have declared that they'll put things on hold for a while.
As the article "Obama to Unveil Plan to Stem Foreclosures" states:
"A trial balloon floated this week suggests that Obama will follow the suggestions of Federal Deposit Insurance Corp. Chairman Sheila Bair, who thinks banks must take some losses and get owners of distressed mortgages into a monthly mortgage payment that amounts to somewhere from 31 to 38 percent of their monthly after-tax income."
As a person who believes that free market forces should have more sway than man-made quick-fixes, I'm somewhat concerned about large scale spending plans. After all, tax breaks and spending require re-payment. However, we're also in one of those phases where one may argue that the large entities that broke the system need to pay to fix it. My largest concern is that the medication may cover some symptoms and prolong the ailment. Witness Japan's willingness to spend their way through a long and labored market downturn... perhaps lending to a protracted recovery.
Regardless of the differences in economic ideology- I'm all ears for what our president has to say. He's coming to my city and I'm happy to see he appears to be hard at work. I wish him very well with his presentation.
Chuck Willman is a real estate agent based in the Phoenix metro area.