What a jumbled mess of information we have in the real estate market again lately. Let’s see if we can break it down, at least, according to me.
Consumer confidence plunged in August, after the government said the economy barely grew in the first half of the year, lawmakers fought over raising the nation’s borrowing limit, and Standard & Poor’s downgraded long-term U.S. debt.
SFGate.com recently posted an Associated Press story that reported Consumers were slightly more confident in the economy in September, but are increasingly worried about the future. The Thomson Reuters/University of Michigan’s consumer sentiment index inched up to 57.8 in September from 55.7 in August, according to a Reuters report.
The August reading was the lowest since November 2008. Friday’s report is a preliminary reading. But consumers are more pessimistic about their future prospects. An index tracking consumer expectations fell to its lowest level since May 1980. Americans are more optimistic about present conditions. That component of the index rose to 74.5 from 68.7.
I guess after the August turmoil, consumer confidence was way down, so low that it had to go up in September. Since the roof didn’t fall in we appear to be more optimistic about our present conditions. Our expectations have become so low that we seem happy, because we know that things could be worse. But we know things aren’t going the right direction so we are more pessimistic about future prospects. I don’t know about you, but I think that we the people of the greatest nation on earth deserve better from our leaders.
The difficulty with trying to fix the real estate market in particular is so tough because there are so many problems right now. Poor home values, financing, appraisals, foreclosures, short sales, shadow inventory, concerns about jobs and the overall economy are just a few of the issues. Many of us in the industry would like to see the government just stay out of it at this point and let the market correct itself, by working through the distressed properties. It seems whenever the government gets involved it just delays us getting past this current market. Instead we get a Jobs Plan that includes real estate in it.
Robert Freedman, Senior Editor, of Realtor Magazine says that the $447 billion jobs initiative President Obama introduced recently, called “The American Jobs Act,” contains some pieces that aim to boost home mortgage refinancing, rehab homes, cut taxes for small businesses, boost road, bridges, and other public-works spending, in part through an infrastructure bank, and otherwise inject momentum into the stalled economic recovery. Many of the specifics are still to come. Here’s a thumbnail summary of the key provisions provided by the White House.
1. Cut in half the taxes paid by businesses on their first $5 million in payroll, targeting the benefit to the 98 percent of firms that have payroll below this threshold. 2. Give a payroll tax holiday for adding workers or increasing wages. The benefit is capped at the first $50 million in payroll increases. 3. Extend 100-percent expensing into 2012. 4. Institute regulatory reforms to help entrepreneurs and small businesses access capital. 5. Offer tax credits from $5,600 to $9,600 to encourage the hiring of unemployed veterans. 6. Institute reforms
to prevent up to 280,000 teacher layoffs and “to keep police and firefighters on the job.” 7. Modernize at least 35,000 public schools and supporting new science labs and Internet-ready classrooms. 8. Invest in infrastructure, in part through a National Infrastructure Bank. 9. Launch “Project Rebuild” for rehabilitating homes, in part by leveraging private capital, “scaling land banks,” and encouraging other public-private collaborations. 10. Expand access to high-speed wireless. 11. Institute reforms to prevent layoffs and give states greater flexibility to use unemployment insurance funds for work-sharing and other programs, including programs in which displaced workers take temporary, voluntary work or pursue on-the-job training. 12. Offer a $4,000 tax credit to employers for hiring long-term unemployed workers; prohibit employers from discriminating against unemployed workers in hiring and training programs. 13. Cut payroll taxes by 50 percent, for an average tax cut of $1,500 per worker. 14. Increase home mortgage refinancing.
To me this looks like a bunch of union jobs for teachers, firemen, policemen and large construction jobs for roads and bridges. Don’t get me wrong. We need fire, policemen and teachers. I would just like to see more that would encourage businesses to expand. I want some positive incentives for the small general contractor to spur some new housing. How about something for the little guy? I will be in San Jose, CA, as you read this along with other members of the Lodi Association of Realtors. There are 7 of us who are California Association of Realtors Directors and we will be working with others from around the state to encourage good legislation and to monitor other legislation that we feel won’t be beneficial to homeowners and private property rights.
Remember to always consult a Realtor. We abide by a Code of Ethics and have your best interest at heart. I will continue over the next weeks and months to keep you informed about the latest trends.
Contact Kerry Suess at firstname.lastname@example.org.