All I want for Christmas is my two par-tees, my two par-tees, my two par-tees, all I want for Christmas is my two par-tees, so we can have a merry Christmas. So the song goes… sort of… No I’m not talking about the office parties and family gatherings… I’m talking about the Republicans and the Democrats. All I want is for these two organizations to work together and then get the heck out of the way. The data is adding up. The economy is improving despite Washington. However, as we saw with the near Government shut down in August, the feuding parties can derail our prospects as quick as you can say, Santa’s little helper. Consider this: Jobless claims: down. Employment: up. Home sales: up. Consumer confidence: up. Consumer Spending: up. Homes in Default: down. Foreclosure Actions: up but shadow inventory down. Corporate profits: up. I could go on like this for an entire page because it’s really happening. But any recovery is predicated on not letting petty Party politics get in the way.
We know for example that last June housing was looking better and at that time I blogged that the worst was over. It even got me quoted on a Philadelphia radio station. Then suddenly the bottom fell out. Why? The debt ceiling debacle. So after suffering an enormous setback, we have finally put that behind us and our economy is improving ever so slightly. The government’s hot air blew us off course and we’re just now finding our way back.
In my local housing market like so many local housing markets, things aren’t so bad. Our inventory is low. Interest rates are stupid low and rents are crazy high. I have a stack of rental applications for a 3 bedroom, 2 bath, 1200 square foot home with Formica countertops that was built in the 1970’s – all people hoping to get this place and willing to pay $2,050 a month for it. Why? Because they’ve harmed their credit during their struggle to survive the Great Recession. Many of these folks will be buyers in a few years after they repair their credit, but for now they are renting and paying top dollar in rent. When rent becomes the same as buying, the choice to buy becomes far easier. If you picture the scales of justice where one side is renting and the other owning, the owning side of the scale is flat on the table with the benefits far outweighing the risk of further downside home price depreciation. Yes there are plenty of naysayers out there talking up a continued decline, lack of income growth and high paying job growth, but I take the position that every fire starts with good bits of kindling and we’re seeing that economic kindling smoldering across the country, in all of these reports.
It’s true that our current economic growth is currently insufficient to pull us out of our economic doldrums and move us forward. But baby steps are what they are but they’re a far cry from crawling of worse, falling backwards. This happened to us in August, but it mustn’t happen again. So this holiday season let’s just hope that Congress and the President can get it together and pass the kind of tax legislation that will help us over the next year. Then, get out of the way Scrooge, because the Ghost of Christmas yet to come is pointing us in the right direction, provided we learn the lessons from the recent past.
Published on 2011-12-22 08:22:22