THE PERFECT REAL ESTATE STORM
INDUSTRY NEWS
October 16th, 2008
Many elements came together to create the current housing crisis according to chief economist for the California Association of Realtors, Leslie Appleton-Young. The following factors contributed to the current crisis:
- Lack of personal financial responsibility
- Exotic loan products
- Wall Street innovations-derivatives
- Inaccurate pricing of risks by rating agencies
- Huge trade and budget deficits
- Pool of capital seeking a high return
- Low interest rate environment
We are in a dangerous time as GDP is slowing, consumer consumption has contracted, people are hunkering down, unemployment is up and retail sales are down. Despite all this, consumer confidence is up. Why? Leslie jokes that consumers have been seeing their shrinks and have decided to accept the current economic malaise and not stress out over the economy.
The short term critical concern is how soon will the financial systems stabilize enabling economic growth. General forecast for 2009-slow growth and a lukewarm economy.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
