Don't Be that Guy

I guess I should prefice everything I'm about to say as 100% opinion.  I can say that most of it is rooted in the information that I have from the real estate industry as a builder and from my wifes long term career as a mortgage broker.

Now, let me also preface, this is not meant to be a negative, just a serious dose of reality check in case a few of us are living under a rock or simply choose not to smell the roses.

I watch the economic "recovery" and I have to ask myself if it is a real recovery or not.  I know that last month the unemployment rate was just shy of 10% which means walk down the side walk and one out of every 10 people walking by you doesn't have a job.  Even more so than that is the fact that the underemployment rate is right at 16.6% which is a combination of unemployed and folks that still are working but have their hours cut back.  Scary.

I truly believe that the real estate market is such a major driver of the economic health and stability.  In talking my friends who are still building or involved in the trades, the slump continues with no real prospects of returning.  Some of the largest companies in the Boise, ID area where I was a builder have officially shut their doors.  And when I talk about larger companies, these are companies that had serious staying power and actually had the ability to continue with their doors open, but the amount of money going out was simply to keep paying their employees, noble, but at the end of the day, that can only go on for so long.

As far as the numbers on forclosures and that sort of thing, I can tell you that the banks simply are not pursuing forclosures at this point.  I do not know a ton of people, and I am aware of more than 10 people right now, that are pushing two years in their homes without making payments, and they have not even been served preliminary paperwork to start the forclosure process.  That is scary.  I understand the banks would rather have a homeowner in the property protecting their interest, but at the same time, when these homes hit the market as forclosures, won't the prices continue to drive down.

By no means am I a financial wiz, but when the additional forclosures hit the books, will that have serious consequences on the banks numbers?  Would that potentially cause some economic issues with investor confidence. 

The slow down of the real estate market affects every service industry, manufacturing industry, you name it.  I can tell you, the real estate community likes to spend money.  When those dollars are gone, the resturaunts, botiques, vacation rentals, and all of the extras start to suffer as well....i.e. more job loss.  The economy lost another 30,000 jobs in January again.  So, are we really recovering, when we still are not creating a net job increase.  I guess its not getting as bad as fast is the moral of the story.

The reason why I said don't be that guy, is because I like to have a positive outlook on life and I believe I do, but there also has to be a rationalization of reality.