Filed Under Buying, Housing Market, Resale · Tagged: Bernanke, federal government, recession · Print This Article
I’m sure you’ve heard: “The recession is over!”
Okay, not so fast. Yes, there are reports — including from Fed chairman Ben Bernanke — that the recession may be likely over. However, there is a big BUT after that sentence.
The recession is possibly “over” but recovery will still be long and slow. Bernanke says, “Even though from a technical perspective the recession is very likely over at this point, it is still going to feel like a very weak economy for some time as many people still find their job security and their employment status is not what they wish it was.”
Employment numbers are still low, but losses have slowed. This makes sense — employers will simply stop cutting jobs before they start adding them again. And surveys have reported that wages are actually going up for people who have been able to keep their jobs.
Despite reports that Cincinnati is still on the lower end of the recession turn around (a Brookings study of 100 metropolitan areas has put us in into the group of 20 cities are in the second-weakest category), the $8000 tax credit has kept our local housing market moving to some degree. And we know that the economy has so much to do with confidence: people feel confident, they spend money, business do better and stop cutting jobs, etc. These reports that the recession is “ending” are going to affect the market.
Here’s what this means for buyers and sellers: the home prices will likely start to increase in the area, albeit slowly. If for some reason you have still been sitting around waiting for the market to “bottom out,” that has already happened. (As far as we can predict.)
Sellers still need to remain realistic. There could also be a lull once the first-time buyer tax credit expires. But buyers may want to think about acting soon as prices (and possibly interest rates) increase. And sellers can start to feel more optimistic that the market may be finished getting worse.
I’m not done with this topic — there is a lot more to talk about regarding Cincinnati’s future, as well as what might happen with interest rates. Stay tuned to the blog for more info!
Read more:
The Wall Street Journal : Bernanke’s report
The New York Times: Wages grow for jobs
Cincinnati Business Courier: Cincinnati still ‘weak’
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