Thursday, October 30, 2008

How much do you know about the economy?

Every morning at the coffee shop I chat with a number of different people--blue collar, management, writers, teachers, clerks and school children. Yesterday sitting with the two Columbus school teachers who usually join me around the fire with their newspapers, I said, "At the beginning of 2005, 1.8% of non-rental homes were empty and waiting to be sold. What do you suppose it was as of yesterday (Tuesday, Oct. 28). The wife guessed 10%, the husband 50%.

The answer is 2.8%. Both of these people are well educated, parents of college students, teachers, Christians and Republicans (actually, I only know they are voting for McCain, not their party). So how could they be so far off? The media's constant negative drum beat. And the unrelenting, dishonest, lying Obama ads. Even if you don't plan to vote for him, the constant downgrading of the economy and negative view of the American people as rich racists from Team Obama takes its toll. I even get them on my blog. [into the trash they go]

Most of these house vacancies waiting for sale are in eight states, and by far most are in California and Florida. I know a family who sold their Florida home this past summer. It had been on the market 5 years ago, but was taken off after several weeks because the owners just didn't want to be bothered with keeping it up for showing--it interferred with their home business. But in 2008, when it sold in a down market, they actually sold it for more than the sale price in 2003! House prices in California and Florida were already so inflated, that even in a down market, sellers are making out just fine. Many of the foreclosures are the result of people being allowed to buy who really couldn't afford it thinking prices would continue to rise and the could refinance when the balloon popped.

My son lives in a fairly new, but very modest neighborhood in a southeast suburb of Columbus. I asked him if there are many houses for sale in his neighborhood or foreclosure signs. No, nothing different, he said. Here in Upper Arlington I see quite a few business vacancy rental signs, but other than staying on the market longer, I don't see a housing problem. There's that new ugly high rise across from the parking lot of Kingsdale, but I think that's a problem of location. An inflated view of what your home is worth in any market, any city, any state is a problem. Remember, just a few years ago, people were flipping houses in a matter of months, and owners were taking bids for more than the asking price. If you sold in that market, you probably didn't call it unfair to buyers.
    The number of homes sold in Ohio rose in September, the first increase in 20 reporting periods, the Ohio Association of Realtors said today.

    Sales in September totaled 10,387, up 3.5 percent from 10,036 in September 2007. The average sale price, however, fell 6.3 percent to $134,135, the group said.

    Activity during September picked up significantly in several markets, notably northeastern Ohio... Columbus Dispatch


R. L. said...

If there really is no crisis, economic or otherwise, as you seem to be arguing here and in other blogs, then how is the involvement in the economy by the government a problem?

Norma said...

There is a huge problem with the government asking us to bail out the banks. Most mortgages are sound, a small fraction of the market were subprime. But if you've ever seen what termites can do. . . or a few cancer cells. . .