More Doom And Gloom? – The Impact of the Housing Market….Oh,…and the Grand Canyon
ByHey....thanks for coming back! We sure do appreciate it. A repeat reader is a compliment....for sure! Please make sure you subscribe!
Greetings from somewhere in Arizona!
I am on my way for a backpacking trip at the Grand Canyon. I have my back pack, my water, and…and….and…
I decided this year not to go to the Maui Mastermind and instead do something that threatens my life.
Anyway….I would like to leave you with an uplifting article regarding the impact of the housing market. Why is this uplifting? Well…in reality it is not….but what a great time to be liquid because the opportunities are coming……
Click on this link to read the article from the source or read below….until next time…..rob
Housing Woes Threaten Broader Economy: Report
By Parke M. Chapman
Nov 27, 2007 4:40 PM
The housing crisis is poised to deliver more shocks to the U.S. economy in 2008.
This morning, the U.S. Conference of Mayors
(USCM) unveiled a grim report detailing how spiraling losses from the
residential foreclosure crisis will rattle the nation’s largest metro
areas. Ripple effects from the flailing housing market could also ding
the national economy through lower tax revenues and job growth.
The dollar volume of projected declines is
sobering. Based on the forecast, foreclosure activity will trim gross
domestic product (GDP) growth in the nation’s 361 largest metro areas
by $166 billion in 2008. Some areas will feel the pain more than
others: As many as 128 metros will post “sluggish” gross metropolitan
product (GMP) below 2% in 2008. GMP is the combination of local GDP
growth and total economic output, according to the survey.
“Not that long ago, economists said housing
was the backbone of our economy,” says USCM president Douglas Palmer,
Mayor of Trenton, NJ. “Today the foreclosure crisis has the potential
to break the back of our economy.”
The report, which was prepared by financial
analysis firm Global Insight, projects that roughly 524,000 fewer jobs
will be created in 2008. Job losses of that magnitude would skim $6.6
billion in tax revenues in ten states. Even so, the survey stops short
of forecasting a full-blown recession in 2008.
Markets where housing values shot up in recent
years are more exposed to slower growth. The nation’s largest metro
area, New York City, stands to lose more than $10 billion in economic
output due to the mortgage crisis. Los Angeles and Dallas round out the
top three with $8.3 billion and $4.0 billion in reduced economic growth
next year.
“The foreclosure crisis is no longer just
about mortgages,” says Detroit Mayor Kwame Kilpatrick. “Entire
neighborhoods are being negatively affected on several levels. This
issue is now the number one economic challenge of many major American
cities.”
It could take years for housing values to
recover from this current downturn. For the near term, the USCM report
estimates that average home values will drop by an additional $519
billion in 2008, bringing the total forecast of lost equity for the
nation’s homeowners to $1.2 trillion.
Value declines could crimp economic growth as
homeowners are unable to tap home equity lines of credit. The USCM
survey expects the U.S. economy to grow by just 1.9% in 2008 (one
percentage point lower than it would have without the mortgage mess).
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