Taking Stock(dale). Where are we? The American economy feels a bit like that phrase uttered by Ross Perot's running mate, Admiral James Stockdale during his vice presidential debate a number of years ago.
"Who Am I? Why am I here? How did I get here"?
Contradictions abound as to where we actually are right now. Oil prices are skyrocketing due to demand (by the way with China putting 2500 NEW vehicles on the road every day, don't expect that to get better anytime soon). Consumer confidence has reached it's worst point in more than a decade and banks and major lending institutions are being watched daily for some stress point that could lead to a failure. Recession? Recession? RECESSION? (he says in Jim Mora like amazement). Of course we're in a recession. We don't need two quarters of documented history to tell us that. Yet despite all of that the stock market seems to have stabilized over the past week or so. While I don't agree with the overall observation that mortgage rates are historically low, many do feel that's the case. NOTE: In my mind, far too many people have 5.0%+- mortgages obtained in the '04-'05 years to think 6.0% is a 'good deal.'

While the credit crunch has lead to significantly more stringent guidelines for getting a mortgage, don't think anyone with a pulse couldn't get a VISA card right now. I think even this guy would qualify today:

While the unsecured credit market has become a dead man's party at this moment in history, that too should tighten some as lenders take a pounding this year from defaults on bank cards and the like. Frankly that couldn't come soon enough. It is beyond ridiculous how easy it is to get unsecured credit given how easy it is to wipe it out and start over. It's also a major contributor to identify theft, another problem plaguing the 'good credit' market.

So where does that leave us in the housing market? The summary version is that I still believe, as I have for months, that those who buy homes in our current environment over the long haul, will look at it as one of the best investments of their lives. The cost of building new product will never be less than it is today. If you're a seller, forget trying to understand the market. It's not about price point, meaning you're better off at $250K than $800K. What's selling today is unique.

Well perhaps not quite this unique but unique none the less.

By my definition what qualifies as unique in Today's New World Of Real Estate is a home that fits the perfect need of an active and motivated buyer in the market place. Sound simple? It's not. There aren't that many of those active and motivated buyers out there. If you are one of those, try and avoid this pitfall: Don't think when you find the home that fits your wish list you are going to offer .60 on the dollar and buy it. The overall market has already forced that property into a price contraction. If it hadn't, you wouldn't be looking at it.

When will it all come back? Oh that's easy. When new construction grinds to a complete hault so that current inventories are absorbed and employment and wage growth occur, thus reinvigorating demand to the point where it exceeds supply. Pretty simple stuff and economically sound....and no if you're wondering I didn't write it but I agree wholeheartedly. The time is coming when we will see prices begin to rise but in the meantime, don't believe everything you read about how horrid it is out there. There are challenges but the cycle will turn.

Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG