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Posts Tagged ‘Real Estate’

Nine Reasons Why This Economy Feels So Bad

Posted by Ram Kumar Shrestha on August 8, 2012

The recent slump has been unusually painful, and the feeble recovery has been disappointing. But today’s economy seems even worse than it actually is.
 
Man holding empty wallet

H. ARMSTRONG ROBERTS / RETROFILE / GETTY IMAGES

Recent U.S. economic troubles are often referred to as the Great Recession, implicitly equating them with conditions during the Great Depression. Yet by many measures the economic deterioration of the past few years is not as serious as in some earlier downturns. The drop in GDP from peak to trough for the 2007-09 recession was indeed severe, 4.7% compared with 3.2% for the 1973-75 recession. Still, it doesn’t begin to compare with the 26% decline of the early 1930s, the 18% of the 1937-38 recession or even the 12% of the often-overlooked 1945 slump. And peak unemployment was higher not only during the Great Depression, but also during the recession of the early 1980s.

Moreover, if you look beyond the national averages, several past recessions have been more destructive in certain specific regions. Rust Belt manufacturing was badly battered in the 1970s – indeed, Detroit and the U.S. auto industry have never fully recovered. And the Oil & Gas business, especially in Texas, needed a long time to bounce back from the 1980s. All things considered, the recent recession may have been worse than average, but it was hardly unprecedented – and nowhere near comparable to what happened in the 1930s. So why do today’s economic troubles seem even worse than they are? Here are nine reasons:

The recovery has been hugely disappointing. Compared with today’s feeble gains, the rebounds that followed the deep recessions of 1973-75 and the early 1980s were robust. Within 18 months, real GDP growth touched 9% and remained well above average for several years. By contrast, the current recovery has failed to get much beyond 4% at best and has averaged less than  2.25% over the three years since the official end of the recession. Read the rest of this entry »

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Good News from the Construction Industry — But Will Housing Take Off?

Posted by Ram Kumar Shrestha on July 19, 2012

A construction worker installs a window in a new home at the Arbor Rose housing development on July 18, 2012 in San Mateo, Calif.

JUSTIN SULLIVAN / GETTY IMAGES
A construction worker installs a window in a new home at the Arbor Rose housing development on July 18, 2012 in San Mateo, Calif. The Commerce Department reported that housing starts surged 6.9% in June, the highest increase since October 2008.

While Ben Bernanke spent the past couple days on Capitol Hill delivering some dour predictions for U.S. economy, the one sector in America actually pulling its weight these days — housing — had a pretty good week.

 

Yesterday, the Commerce Department reported that housing starts were at a seasonally adjusted level of 760,000 — a four-year high, 6.9% higher than last month, and 16.8% higher than the year before. New building permits dropped from the month previous, but were still nearly 20% higher than they were last year.

This positive news echoed Tuesday’s confidence survey from the National Association of Home Builders, which rose six points to 35 for July.  While it takes a reading over 50 to indicate healthy market conditions, the gain was the largest the survey has seen in ten years and the measure put builder confidence at its highest point since March of 2007 — just months after the housing bubble reached its peak.

(PHOTOS: ‘No Place Like Home: Foreclosures in America’)

These two pieces of news reinforce the narrative that the housing market is finally recovering after six long years of falling prices and tepid demand. It appears that prices have finally hit levels that represent the true value of the underlying properties, and this coupled with historically low mortgage rates has motivated capable investors to enter the market once again.

After the good news this week, The Atlantic’s Matthew O’Brien wrote, “Let’s call it a housing recovery.” Indeed, even the Federal Reserve Chairman himself, Ben Bernanke, pointed to housing as the one demonstrably vital area in an otherwise anemic economy. In his testimony to Congress this week he said: Read the rest of this entry »

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Five places where land is free

Posted by Ram Kumar Shrestha on October 21, 2010

Wallet Pop By Ann Brenoff

In the spirit of settling the wild, wild West,some communities are giving away free land lots. What’s the catch? You have to agree to build a house (or park a mobile home) and live in it. For the most part, the places doing this are rural communities without much in the way of work opportunities. But there are definitely some upsides and we can think of worse places to wait out the recession than near a mountain stream in Alaska. Besides, doesn’t the whole world work virtually now, or is that just my hemisphere?

The concept is certainly not new. Homesteading incentives dating from 1862 helped settle the far reaches of the country. And as population density increased, communities thrived. Some communities today simply need more people. Land, they’ve got plenty of, so why not give it away? People pay taxes and that allows schools to stay open, roads to be built, public services to be paid for. Read the rest of this entry »

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