Written By:
Ingo Winzer, President
Ingo Winzer, President
Local Market Monitor
Quite
aside from the $10 trillion home owners owe on their mortgages - an amount that
doubled in the last 20 years - they
owe more than $3 trillion in consumer debt, $10,000 for every man, woman and
child in the US. This used to be mainly credit cards and car loans, but over half of it is now concentrated in
two groups that are very important to real estate. Home owners owe $450 billion in home equity loans, and young adults owe $1.2 trillion in student loans (whew!). Is
it any wonder that so many home owners and would-be new ones have to sit on the
real estate side lines?
With
many buyers unable to buy, it's pretty clear why home prices are below income
levels in most local markets today and why new construction has added so little
to the economy. What's worrisome is that this situation, especially for young
adults, isn't going to change much in the near future.
In
September, the number of jobs was 2.0 percent higher than a year ago - a sign
of slow, continuing improvement. Jobs were up 4 percent in construction, 1.3
percent in manufacturing, 1.8 percent in retail, 3.8 percent in business
services, 2 percent in healthcare, and 2.8 percent at restaurants.
Government
jobs were flat, not only at the federal and state level, where political
considerations weigh most heavily, but also at the local level where spending
on education is necessary for long-term economic growth.
