No man is an island…
The Real Story…
News and commentary about the real estate market and related topics.
Dave Parrish, ABR®,CSP,GRI,ePRO®,REALTOR ®, RE/MAX MarketPlace
The opinions expressed here are my own and don’t necessarily represent those of RE/MAX International.
No man is an island…
We like to think of ourselves, as free and independent… it’s built into the genes of every American citizen and those too who wish to be citizens of this land. As a matter of fact, a large part of the holiday just celebrated honors not only the historic event occurring more than 200 years ago but also a national belief that we operate independently of all others. It is very much similar to thinking of ourselves, as an island unaffected by the events of foreign shores or different planes…
No Man Is An Island…
All mankind is of one author, and is one volume; when one man dies, one chapter is not torn out of the book, but translated into a better language; and every chapter must be so translated…As therefore the bell that rings to a sermon,
calls not upon the preacher only, but upon the congregation to come: so this bell calls us all: but how much more me, who am brought so near the door by this sickness….No man is an island, entire of itself…any man’s death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee.
John Donne Meditation XVIIFrom Devotions Upon Emergent Occasions (1623)
In the realm of real estate we have quickly and painfully learned how inaccurate this idea is… for we are now paying for the irresponsible and greedy actions of many. They may have been mistakes made by others and it may even be that we too contributed to those pains now shared.
As much as we want the turmoil of this recession and the dower real estate market to be over, it is not nor will it be anytime soon. As a matter of fact there are reports from dependable sources that not only is it continuing but that it may even dip further.
In a recent interview economist, author and Yale University Professor Robert Shiller (co-founder of the Case-Shiller Home-Price Index) says that chances are ‘substantial’ that the United States is headed back into a recession.
A weak U.S. housing market and a murky global economy indicate that the country is at a "tipping point" at the edge of a fresh economic contraction. While some economic models suggest the economy is on the path to recovery, we are in unchartered territory, which due to the numerous unknowns makes these models less reliable. Shiller believes the U.S. economy will face a double-dip… further economic stress largely based on the current fragility of the housing market.
Home prices dropped 33 percent in 20 cities through March from their 2006 peak, reaching their lowest level since 2003, according to the latest Case-Shiller report on May 31. The decline means the sector has double-dipped back into negative territory, as the index fell below its previous post-housing-bubble low set in April 2009.
Shiller has said that U.S. housing prices could decline another 10 to 25 percent over the next five years. "There’s no precedent for this statistically, so no way to predict," Shiller said recently, according to Bloomberg.
With so many houses in foreclosure, prices will stay depressed, especially with unemployment at 9.1 percent and tighter lending restrictions being the norm at many financial institutions.
Other experts agree that high unemployment rates and a tough economy mean housing prices are still well on their way on a downward slope.
In a recent Bloomberg report Paul Dales, a senior U.S. economist stated "With the foreclosure pipeline still full to bursting, it’s hard to see this downward pressure on prices abating."
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