As usual I have been reading a lot about the real estate market and the stock market. I have accepted that I am a hard-core investor at heart. Part of the reason it has been a while since I have updated the blog is that every other writer seems to be writing about the same issues I would have written about. I generally sit down to write the blog when I am inspired by something. It is hard to be inspired when everything you read (books, newspapers, internet) you just shake your head up and down in agreement. It seems as though all has been said. Is there anything fresh to say? In the end, I write for you.
Locally here in SW Florida, privately owned land may be approaching a bottom. Bank owned land in many cases is still priced too high. On the housing side we have just the opposite occurring as privately owned homes are overpriced and banks are almost giving houses away. It has been reported the 825B Obama economic rescue package will focus a lot of money on infrastructure. I have even heard that Florida may get as much as 40B for infrastructure spending! I certainly think it is a better use of taxpayer money to build infrastructure than to bail out every company that has hit hard times (AIG, Citi, GM et al).
The new infrastructure plan, when fully implemented will (temporarily) create many jobs for those hit hardest by this recession - real working people. Don't get me wrong, I would love to make 40 million a year for mismanaging a company. Let's just say I am too worried by the newly unemployed CEO's that have helped to run the economy into the ground. I am very concerned about the good folks that need jobs to feed their families and make their house payments. Heck, I would hire them if I just had a project to put them on.
Alas, it is going to take more than you or I to turn the corner on this economic situation we find ourselves in. I believe we are planting the seeds today that will be our crop of success in the future. Just like any crop it will be a while before we are ready to harvest the fruit of our labor as a nation. Very few crops are able to be observed growing. From day to day, the field looks the same. As time marches on we will start to see changes that are positive. Sometimes a change is not something happening, rather it is the absence of something.
Take the nightly news. Last night it was reported that more than 30,000 layoffs were announced by a slew of companies. At some point companies will stop laying off workers; yet that will not make the news. The next notch of improvement will be companies of all sizes hiring new or laid off workers and that too will probably not make it into the news. Remember the saying; "believe nothing that you hear and only half of what you see" The saying can be applied today as well.
We hear all sorts of bad news and that makes us feel bad. But when you look around where you live, most of us are not in immediate danger of losing a job or house. One more comment on last night's news. It was reported the sale price of homes compared to a year ago was down some 15% in price. Okay, that is not exactly good news. What I think was under reported is the volume of home sales was actually up. I am sure a good reason for the volume up/price down was foreclosure selling. At least we know the buyers today actually have money to buy them (this is inferred since I do not know of many banks lending right now). Part of the problem we have right now is an enormous glut of existing homes for sale and the sooner we can get those homes sold and off of the market the better. This economy will improve. It will just take time before we see the seeds in our field sprout and even then you are going to have to look hard to see the new growth.