Image via Wikipedia
With foreclosures the name of the game in real estate markets nationwide, there is no shortage of houses for sale. Banks that were required to reclaim houses for which they were no longer receiving payment have been and continue to be eager to get them off their books. That has led to a huge number of homes – condos, apartment buildings, and individual houses – that are for sale. Couple that with people who are upside down on their mortgages, owing more than it is worth, and the foundation is laid. Homes aren’t selling well, because the standard recipe of building up equity while saving extra money attained through promotions at one’s job, isn’t presently working.
People might still be getting promoted and earning more than they were several years ago, but there are fewer people in this situation. Unemployment has spiked, in sync with the housing downturn. Most who have retained their jobs have seen house prices spike and are now gun shy about buying another home, fearful that the appraised price might be inaccurate. With few people willing to take a chance on getting burned in a real estate transaction, the market continues to remain stagnant.
Every sector of the economy continues to languish as a result. With houses holding ‘for sale’ signs in their front lawns for years in many cases, real estate agents are looking elsewhere for work. The construction of new homes has been pared back at an unprecedented rate, as the overhang of old homes for sale lingers. That has put construction workers out of work. Across industries, the housing slump has affected the economy in a huge way.
