What Will The Economy and Housing Look Like In This Year?

By the account of many top economists 2011 will be a “painful” economic year. There are a Residential Real Estate Agent number of indicators that point to 2011 as a frustrating transition year much like 2010.
In the quarterly AP Economy Survey completed October 22 Associated Press polled 43 leading economists on the broader economy, jobs outlook, and expected government action and consumer behavior. The economists believe employers will remain conservative in their hiring. Consumers will remain cautious about spending money.
Unemployment will fall gradually, but will only dip from 9.6% to around 9% by the end of 2011. This is a higher unemployment rate than the same group of economists predicted in last July’s survey when they anticipated unemployment would dip to 8.7% Real Estate Marketing Salary in 2011. This group has been getting increasingly pessimistic, especially about unemployment, throughout 2010. Many of these leading economists expect that unemployment will not fall to “normal” levels of between 5.5 and 6% until 2018 or later.
With the mid-term elections on the horizon and a high probability that the election will change the majority in the House and possibly also the Senate, there is little sentiment to approve any more spending for economic stimulus.
Some economists, including the harbinger of the housing crash, Nouriel Roubini, believe the halting of stimulus spending can’t come soon enough. High government debt is fast becoming part of the problem, and not part of the solution, although most economists agree that some level of stimulus was needed to keep the economy from sliding into depression back in 2008 and 2009.
The Mortgage Banker Association has also come out with some discouraging predictions for 2011. They say that loan originations will reach their lowest numbers since 1996. While loans for new purchases will exceed the meager numbers for 2010, refinancing is expected to fall. The MBA actually thinks that unemployment will increase to 9.9% in the first quarter of 2011 and will not fall to below 9% until near the end of 2012.
There is so little good economic news on the horizon, even in the face of an expected shift in the political scene that it is easy to get discouraged. As Short Sale investors, however, we can at least feel good that we are part of the solution, not part of the problem. The faster we can get distressed housing back into the normal flow of the economy, the better everyone will be.

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