The last 18 months have been a free fall for the US housing market with a record number of foreclosures in previously vibrant markets the number of homes on the market has also effected current home owners.
As we watched land developers go out of business and lots being sold for a dollar just to get rid of them you may have wondered if the new lower prices for homes would attract new buyers.
In addition to lower prices the Obama Administration offered an unprecedented first time buyers rebate that accounted for over 51% of home sales in 2009 and intends to extend that first rebate with a second payment to the same buyers of reportedly up to $12,000.
All of this has put even more people in homes that they can not afford.
Market researchers say that an additional 7 million homes that banks have been forced to hold on to due to the bank bailout funding will soon hit the market. Larger banks are now beginning to repay the money that was given and or forced on them and once completed they are expected to flood the market some time beginning in mid summer of 2010.
With an estimated 10% of the working population now unable to get jobs for periods extending 6 months or more current owners who can not sell their homes for as much as their mortgage balance are seeking bankruptcy protection. This places an even higher burden on banks that are beginning to dig their way out of last years problem and makes it extremely difficult for even credit worthy buyers to find financing.
So, what does this all mean?
If the government regulators including Congress and President Obama continue to follow their current trend of placing low income people in loans that they can not afford every home owner is at risk no matter how secure your income is.
Eventually higher local taxes will be assessed on those persons who remain in their homes.
Most people should expect an initial 10 percent increase prior to the bank owned 7 million homes reaching the market and an additional 10 percent after this occurs.
For the average three bedroom home located in Pennsylvania, New Jersey and New York this will mean well over $3,000 per year just in higher local taxes.
State Budgets in Pennsylvania and New York along with 95% of the country have seen multibillion dollar deficits causing the shutdown of Libraries, State run Colleges and reduction in on the job Police.
This at the same time that the Obama Administration has spent approximately 400% more in a single year then any previous President with plans to double that in 2010.
It is very difficult to say how the next year may turn out without taking all of these factors and many others into consideration.
The fact is even the Clinton administration was quick to reduce the budget by laying off or eliminating over 200,000 Federal Jobs that were considered unnecessary.
For a real recovery Federal, State and Local Governments must follow the same example and cut budgets dramatically.
And the real truth is that most people are behind cuts of this type.
Can we really justify huge expenses like the $5 Billion dollars Pennsylvania spent for new Sports Stadiums when the teams should really cover the cost? I mean really have you taken your family to a Sports Game and did you get a discount considering your tax dollars built the stadium?
Not to mention the fact all of the months those stadiums go idle not being used and many are designed in a way they can not be used in inclement weather.
And this is just one thing…
The fact is influence is robbing our tax dollars.
There should be no payments for anything that is not necessary when we have to borrow that money from other countries or from the lives of our children.
Unfortunately 51% of people who bought homes in 2009 and did not deserve the loan they got because they can not afford to pay it back don’t give a crap about what is responsible…
Like our government they believe they have an open check book that they will never have to repay.
and Unless we do something about it … they are right.
So the forecast for 2010 is more of the same. The economy may not implode again before the next time the ball drops but we are on a course much worse then we saw in 2009 and it seems to be full steam ahead from our president … crashing us right into the iceberg dead ahead.