Photo Credit: Iweekly.com
If you’re hoping for a major change in the housing market this year, you might have to wait just a little bit longer. We’re rushing to the end of one of the toughest years for housing – ever, without an idea of when the turnaround will start. We’re all hopeful for better things, and we have seen some improvement in some markets, but overall, there are several things that will continue to hurt the market for awhile; here are three.
1. Unemployment. Not having money to pay one’s mortgage is bad enough; not having money to buy homes that are sitting around at bargain prices is a shame. Unemployment showed a dip in November, but if you look at how the government calculates unemployment numbers, it could be packed with a lot of false hope. Unemployment continues to be high in areas across the country where the housing market is taking it on the chin: California, Florida, Nevada, Georgia and Ohio. Until that is addressed, there aren’t enough people left who have the income to help turn things around and people worried about losing their job won’t buy a home.
2. Census. Unemployment has helped drive this number in crazy ways for many areas. For the first time in the decade, Florida lost more people than it gained over the past year. Nevada had been the state with the fastest growth in the decade until the last couple of years, fueled by both unemployment and a water shortage. Michigan and Ohio have both lost people, and Georgia and California haven’t decreased, but haven’t grown either.
3. Banking. The banking industry lost nearly 150 banks this year; it could hit 150 by the last day of the year. Almost all of those banks failed because of lending practices that proved to be disadvantageous to them. The banks that took them over have tougher lending standards, meaning it’s harder to get approved for new loans. With nearly 250 more banks being looked at as being potentially tenuous, including both Bank of America and Citigroup, especially in states that have had the roughest problems in the housing market, it doesn’t bode well for success in the coming year. Still, we can hope for a turnaround of some sort.
Turning around unemployment and creating new jobs or careers solves the first two problems and could “right” the ship. We can only hope that somewhere, somehow, someone figures it out and gets the economy moving in the right direction.
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Mitch Mitchell is a consultant who writes and participates in many different fields, including real estate finance issues. 
The housing market will never truly recover until jobs return and unemployment stabilizes. Hopefully that is sooner rather than later.
Very good points here… However, I might add there billions in unsecuritized and option arms from 2010 through 2012 that will reset so it’s fair to say we won’t likely see any positive rebound on a national level until about 2013 even if the above factors improve.
When is the current housing crisis going to be over? After reading your article, I have realized that I am going to be paying on an upside down home for the rest of my life.
No improvement here in the UK. House prices falling, building sector downsizing across the board. Worrying times still