It was reported on Tuesday, Sept. 15 by The Associated Press that Federal Reserve Chairman Ben Bernanke said the worst recession since the 1930s is probably over, although he cautioned that pain - especially for the nearly 15 million unemployed Americans - will persist.
Bernanke said the economy likely is growing now, but he warned that won't be sufficient to prevent the unemployment rate, now at a 26-year high of 9.7 percent, from rising. "From a technical perspective, the recession is very likely over at this point," Bernanke said in responding to questions at the Brookings Institution. "It's still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was."
Against that backdrop, Michael Williams, dean of Touro College's Graduate School of Business, disagreed with Bernanke's assessment that the recession probably ended.
Williams maintains that troubles in both the residential and commercial real-estate markets are prolonging the downturn. Williams believes the economy is still shrinking and won't turn around until later next year. "This recession lingers," he said.
So, who's right? Well, they probably both are to an extent. I think the important thing to consider is that now we are having an argument over where the bottom is or was and what recovery will look like going forward.
You have heard me mention consumer sentiment or consumer confidence quite a bit over the last year. This is what it really boils down to when you consider a financial recovery, as well as, a housing recovery.
Retail sales jumped 2.7 percent in August - the largest increase in over three years.
Housing affordability is great, interest rates are very low, inventory of homes currently on the market are very low - these things should lead to a Sellers market. Consumer confidence is low, people's perception of our economy is not great and generally a large number of people are worried if they'll still have a job in 90 days from now.
We have seen an up tick in certain price points in our local housing, nothing that indicates a major bounce back but good signs that show stability more than anything. Earlier this year the Fed reported that most major lenders had actually tightened their lending standards even further in the last 90 days. This doesn't help things either, going from the zero paper - liar loan system to the infinite paper - iron fisted system. We need normalcy in lending as well.
I like the fact that I see builders in Stockton now moving forward, albeit slowly, with a few projects and all various types of media folks are guessing the 'bottom' and attempting to be the first to report a recovery. These are all important factors that point to a recovery.
With that being said - all of you home buyers out there - now is the time to jump off of the fence. Make a decision to purchase a home that fits with your financial situation, no one will time the market perfectly, contact your favorite Realtor and get started.
I welcome any comments, questions or feedback. Please email me at firstname.lastname@example.org. Ryan Sherman is the President of the Lodi Association of Realtors.