What Would a Depression in 2009 Look Like?
By Joel Burslem, Monday, November 17, 2008.A thought-provoking (and depressing) summary from The Boston Globe:
The lines wouldn't be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there's more work - or just a relative with a free room over the garage. Already hollowed-out manufacturing cities could be all but deserted, and suburban neighborhoods left checkerboarded, with abandoned houses next to overcrowded ones.
What's your take? Are we heading towards a Depression next year?
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Submitted by Shannon Ziccardi on November 17, 2008 - 6:52pm.
Though I felt compelled somehow to respond, it was only to say this: Such speculation is not a productive way to spend our time. Why not focus upon the good that is happening and avoild heralding the arrival of doom... Until we begin to concentrate on the solutions, consumer confidence and and a robust economy will continue to elude us.
I say that the glass really is half-full! Keep your chins up out there!
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Submitted by Tom Sykes on November 18, 2008 - 6:30am.
I strongly agree with Shannon. This is no time to be wasting our energy on self-fulfilling prophecies and negativity. The media has so much power, why not focus on the future and current bright spots and give people some hope? This was an extremely poor choice made by the editors at the Boston Globe (and I'm sure it will echo across all the national media).
It will get better - it always does.
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Submitted by Bill Jur on November 20, 2008 - 6:13am.
How about the headline saying: "How Would a Recovery in 2009 Look Like?"
What is this constant negative drumbeat from the major media? Perhaps the answer is "It sells newspapers". But readership and advertising in major newspapers has been going down over the years (there's a reality).
I must agree with the previous two posts - this self fulfilling prophecy doesn't do anybody any good. Except for the writer, Joel Burslem, getting his paycheck.
It's amazing how many people I've spoken to since the beginning of 2008 that are convinced we've been in a recession. Isn't a recession 2 consecutive periods of negative GDP growth?
News Flash - that hasn't happened.
Hey Joel - how about really standing out from your colleagues, do your homework and write a story of what has to happen in the economy to continue the growth?
Bill
www.sellphillyproperty.com
Submitted by Lawrence Sanek on November 20, 2008 - 7:55am.
Well lets see what the media will do with this. It use to be the media would report what they saw. The big problem is they no longer report what the saw but do a self interview and report what they think or worse yet report what they want to have happen.
How about having the MEDIA START REPORTING MORE THEN DOOM AND GLOOM and REPORT THE GOOD THINGS that are happening as well. The medias biggest concern is how many readers/viewers do I have and can that translate into charging more for advertising.
Lets help this country out, not put it into a down hill slide. Lets get away from one sided news.
Can the media accept the challenge of actually reporting what is real and not putting slants on it for their own benefit.
Lawrence Sanek
www.castledreamrealestate.com
Submitted by Tamara Heyward on November 20, 2008 - 8:51am.
The media may have a sensationalistic way of reporting the news of the day, but it is not their fault that the stock market is down and unemployment is up. When our clients come to us with concerns based on what they've seen in the media, I hope that we don't immediately go on the attack and start ranting about how the media is just wrong and out to sell papers. That doesn't help to calm their fears one bit, and makes us look unprofessional, and negative, and emotional. And isn't that what we just accused the media of being? Pot...kettle...black...you get the picture.
I agree with Tom, things will get better. I think the best thing we can do is put the accurate information out there, and work with our clients and customers to understand day to day what is happening, and how they can weather the storm.
Submitted by Joel Burslem on November 20, 2008 - 9:04am.
Hi Bill,
Thanks for the feedback. I do understand where you're coming from. Far from trying to be sensationalistic I brought this story to the attention of Inman readers because I thought the piece, while admittedly depressing, was an interesting read. Chances are the Globe writer could be completely and utterly wrong.
Personally, I'm not pessimistic about the future, but I certainly welcome the debate.
Joel
Submitted by Russell Volk on November 20, 2008 - 11:06am.
Hopefully not. I know many people who have lost their corporate jobs and are really suffering now. It's not like people don't have money to spend, they're just scared to spend it. And it's not just big purchases. Coupon generating websites are booming now. Everyone is trying to save some money. Let's hope that Barak Obama will prevent the recession from occuring.
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Submitted by Julie Jones on November 20, 2008 - 12:32pm.
This type of negative hype doesn't deserve a comment. Kudos to all the forward, positive thinkers (no political affiliation required)who clearly are prepared to work together to bring the US economy to an all new height--starting in our own neighborhoods.
Count me in for conversation there!
Submitted by Jillayne Schlicke on November 20, 2008 - 1:29pm.
I just finished reading the Boston Globe story. Thanks for the link, Joel.
I recommend looking at the news stories through a different lense; like turning the lense of a kalidescope and seeing something different.
Read the story from the perspective of a real estate agent who is looking for where the opportunities are...real estate trends and opportunities are sprinkled throughout that story.
It may be unwise to pass the stories by if they appear to be negative on the outset. The author rarely writes the title of the article.
Submitted by Eric Bouler on November 21, 2008 - 8:35pm.
Eric Bouler
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Living in New Orleans in the time of Hurricane Katrina and the aftermath may be what a depression would feel like. The experience has put many things in perspective. We are still living with it today over 3 years later.
Submitted by George Farmer on November 23, 2008 - 3:08pm.
Plus they will be living in their giant SUV's. Actually we are in a vastly different world and intelligence level from then. I don't think we will turn into a dust bowl with horses pulling the BMW's. This too will pass.
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Submitted by William Metzker on November 24, 2008 - 12:09pm.
I didn't reply when Joel's article first appeared because I didn't have time. After reading the replies, I'm glad I had to wait. What I'm more intrigued with than the article itself--a terrific piece--are the replies.
On my office desk, I keep a hardbound copy of an essay by Princeton PhD. Harry Frankfurt. One of George Carlin's words you can't say on T.V is in the title, so let's just say the essay is entitled "On B******t." I keep it there as a reality check.
Perhaps the central point in the essay is what b******t is and isn't. It's not a lie, since a liar knows he's speaking a falsehood. B******t, on the other hand, does not require the speaker's adherence to Truth or Falsehood. He or she may say whatever he or she wants with complete disregard for objective truth.
To bellyache about the Boston Globe's essay as an example of hard times being caused by scurrilous media runs dangerously close to engaging in b******t. These statements ignore reality, which is a failing financial system and several quarters of negative growth. It falls into the same category as "There's never been a better time to buy," or "I'm going to provide her with the house of her dreams," and speaks to why the public is wary of real estate agents.
Submitted by Jaime Sandoval on November 28, 2008 - 6:41pm.
I am a Proud San Antonio Realtor. San Antonio has a very stable Market with the Median Home Price at 149,000.
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Submitted by Cynthia Morris on November 29, 2008 - 8:26am.
Cynthia Morris
Broker-Owner EPHomeSearch Real Estate Services
I say WOW, not at the thought of a global depression but at the responses. Yes we Americans are who we are based on how we started off, our faith in God, and our never ending hope and dreams. Our nation, our communities, our families, our neighborhoods, and our industry will weather these times just like we did before and come out of it strong and vital. So if you know someone that is depressed by the times, remind them what we have already come thru, and that we will overcome. This Texas gals says to any and all doubters....just hide and watch.
Submitted by Lisa P on December 8, 2008 - 2:50am.
It is very obvious that the America is facing economic crisis. Detractors have been accusing payday loan lenders of being predatory lending institutions and being the cause of the crisis we are experiencing, but not many who have had to use their services feel the same way. Many people are thrown off by the mention of the annual percentage rate, or APR that gets frequent circulation. Now, the APR figure that gets mentioned may be true in a very limited context, but how it exactly works doesn't get reported. The rate that gets mentioned is 361% APR, which is enough to scare anyone away. However, to actually get to 361% APR, an individual would have let their loan lapse for an entire year to accrue that much interest. Just like any other service, a payday loan lender will add interest fees to late payments. Look at it this way: If you get a payday loan for $100 on a two week term, you pay $15 to $30 in fees or $115 to $130 in the end for the loan, which works out to 15 – 30% interest. That may seem like a lot, but when compared to a $75 late fee that you would get from making a late mortgage payment that you could avoid by getting a payday loan if you were a hundred dollars or so short on, that $15 - $30 isn't so bad. Also, applying is quick, easy, and approval can be incredibly fast. You can even get your payday loan deposited straight into your bank account through direct deposit within a few hours, and then you can move on with your life. Great convenience for a small price. Click here to read more on payday loans.
Submitted by Karen Thompson on December 18, 2008 - 2:41pm.
Well, I don't mean any harm to any of those optomistic people that blogged here before me, but I am very much concerned about what the country would look like after a depression...I have done all of the things that we are brainwashed to believe would help me to live the American Dream. I went to collge, got a Bachelor's Degree, and then got a Master's Degree....I purchased a home that was within my means at the time, in hopes of getting a better paying job and moving to a more affluent lifestyle. Guess what, there are no jobs where I live, and there hasn't been in at least two years, unemployment rates are at an all time high here, and crime is steadily on the rise because people want to eat...I live in the land of Elvis....Memphis, TN, and we barely even have a classified section in our newsaper anymore because the economy here is so bad. Now I am stuck having to pay for an education that is currently not serving me any purpose and I still can't get the piece of the American Dream that I so longed for when I went to college...and for the record, we've been in a recession since December of 2007, at the admission of the Congress! So while I think optimism is good, REALITY is just as important. And my reality is that life as I know it is hanging in the balance. My company is talking about layoffs...something it's never considered in its 90 year existence. If that doesn't say depression, I don't know what does!
Submitted by Bob Jameson on January 2, 2009 - 1:17am.
A question we would all like the answer to I'm sure. With hopes that the new administration can secure some form of trust in the housing market my personal belief is 2009 will bring some stabilization to the market and not tell 2010 will we really see the market begin a slow rebound, but don't expect to see levels like in the past for some time.
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Submitted by Joyce E Matt on January 14, 2009 - 7:49am.
I also agree with Shanon, we should focus in positive things, try to show that there also nice and good things happening right now.
Submitted by Kristopher T on January 15, 2009 - 2:46am.
Economic crisis brought by the subprime collapse and the increasing number of unemployment rate, as well as the high cost of food in the market is a challenge that we ought to face. That’s why president Elect Obama proposed an economic stimulus package in order to help rebuild the confidence of the ailing economy and to create jobs in the next 2 years. Part of the economic stimulus plan is to double the production of alternative energy. He wants to improve the energy efficiency. We have to find other sources of energy to power the different machines and equipments. We are living in a modern world, and there are a lot of sources wherein we can get an alternative energy and not just solely dependent on oil. Your payday loan source reports on some dissenting Democrats’ responses to Barack Obama’s speech on the economy. Mainly some of the president-elect’s fellow party members had problems with the tax cuts he is proposing. It was a big day for payday loan lenders in New Hampshire, where the industry’s request not to cap interest rates was denied. It was also a big day for Obama, who was officially declared the winner of the November election and launched an effort to extend the deadline for analog-to-digital conversions for television signals. Furthermore, he is being featured in a Spider-Man comic book! http://personalmoneystore.com/moneyblog/2009/01/08/democrats-respond-to-...
Submitted by Kristopher T on January 15, 2009 - 2:48am.
Economic crisis brought by the subprime collapse and the increasing number of unemployment rate, as well as the high cost of food in the market is a challenge that we ought to face. That’s why president Elect Obama proposed an economic stimulus package in order to help rebuild the confidence of the ailing economy and to create jobs in the next 2 years. Part of the economic stimulus plan is to double the production of alternative energy. He wants to improve the energy efficiency. We have to find other sources of energy to power the different machines and equipments. We are living in a modern world, and there are a lot of sources wherein we can get an alternative energy and not just solely dependent on oil. Your payday loan source reports on some dissenting Democrats’ responses to Barack Obama’s speech on the economy. Mainly some of the president-elect’s fellow party members had problems with the tax cuts he is proposing. It was a big day for payday loan lenders in New Hampshire, where the industry’s request not to cap interest rates was denied. It was also a big day for Obama, who was officially declared the winner of the November election and launched an effort to extend the deadline for analog-to-digital conversions for television signals. Furthermore, he is being featured in a Spider-Man comic book! http://personalmoneystore.com/moneyblog/2009/01/08/democrats-respond-to-....
Submitted by Dream Town Realty on February 13, 2009 - 2:04pm.
I agree it is important to keep a positive attitude (as many have said in the previous comments). However, when our president is saying these are the worst economic times since the Depression there is some cause for concern. Fortunately, action to right the situation is taking place as we speak. The multibillion-dollar economic stimulus package mentioned above is on the verge of being approved and many Americans are waiting to see how the programs will help the nation move forward this year and next.
Among the proposed items are job creation (over 2 million by the end of 2010), funding to state governments, money for school construction, individual tax credits, subsidies for health care premiums with COBRA and Medicaid, extended unemployment benefits, college tax credit expansion, and financial aid toward infrastructure projects.
There is debate over whether the economic stimulus package is a long-term fix for the problems at hand. For instance, how will it help those in danger of loosing their homes to foreclosure? Buyers coming into the housing market would benefit from a repeal to drop the repayment requirement for the first-time home buyer’s tax credit, which would be available up to $8,000 under the new plan. The tax break applies to homes purchases before the end of 2009. The new bill would also increase loan caps on federally-backed mortgages to $729,750 in high-priced real estate markets (previously capped at $625,000). With this inclusion, borrowers can get more affordable loans on properties that would not have been considered for a conventional loan before. According to reports, the cap expansion would be temporary.
The stimulus bill is expected to be passed this weekend, but readjustments have already pushed it back from originally forecast approval dates.
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Submitted by Helen D on March 17, 2009 - 4:12pm.
The lines wouldn't be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there's more work - or just a relative with a free room over the garage. Already hollowed-out manufacturing cities could be all but deserted, and suburban neighborhoods left checkerboarded, with abandoned houses next to overcrowded ones.
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Submitted by Helen D on April 28, 2009 - 2:24pm.
In a modern depression, the swelling ranks of the unemployed would possible difference the landscape of the country, uprooting people who would rather stay at which they are and trapping people who covet to move. In the 1930s, this took the visible form of waves of displaced tenant farmers washing to California, but it also had another, subtler effect: it froze the movement of the middle class. The suburbanization that was to define the post-World-War-II years had in fact started in the 1920s, only to be brought sharply to a stop when the market's prosperity collapsed.
Today, a depression could reverse that technique altogether. In a deep and sustained downturn, home cost levels can usual sink a large amount of and not rise, dimming the pull of homeownership, a ample part of suburbia's draw. Renting an apartment - perhaps in a city, where commuting costs are lower - might be more tempting. And although city crime might increase, the sense of safety the current attracted city-dwellers to the suburbs may suffer, too, in a downturn. Many suburban areas have currently seen upticks in crime in recent years, which should only get worse as tax-poor towns depleted less money on policing and public services. payday loans | payday loans ontario | cash advance
Submitted by Geoffrey Schiering on June 8, 2009 - 11:58pm.
In San Diego it looks like we'll be able to pull out of this mess sooner than later. There are multiple offers on most of the distress sales, and even the non-distress sales are selling pretty quickly. The thing that makes me uncomfortable is all the policy-making on the state and federal levels. Statewide foreclosure moratoria don't make much sense to me. That means that the San Diego County real estate market is being equated with Riverside County at the state level, and maybe even with Detroit on the federal level. There is a lot of talk about a wave of foreclosure property that is being withheld. We could use some inventory right now. I'm worried that all of the inventory will be released at once sometime in the future. I think it would be better to set up local bureaucracies or panels of bank asset managers on the local level to handle the foreclosure numbers. Real estate is an inherently local phenomenon.
Submitted by Geoffrey Schiering on June 9, 2009 - 12:03am.
On the other hand, I really do think that the foreclosure crisis could have been handled a lot worse. Moderating the foreclosure inventory has prevented much larger price declines. But I think there is plenty of room for a gradual release of additional inventory.
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Submitted by niroshan samuel on August 10, 2009 - 11:12pm.
thank you for share this
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Submitted by niroshan samuel on August 27, 2009 - 9:09am.
It was only to say this: Such speculation is not a productive way to spend our time.
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Submitted by Marlena Fridrich on August 27, 2009 - 12:15pm.
I don't agree with you Samuel
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Submitted by Lisa Udy on September 1, 2009 - 10:53am.
If we do come to that point where we hit a "depression" I think we are going to have a lot of issue being resolved for it. Some of the policies that are holding our country together today need to be reworked. By having a depression, although it would be terrible, we may be able to fix a lot of the problems our country is looking at in the future. Once you hit rock bottom, there is only one way to go, and that is up.
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Submitted by kamal dayananda on November 15, 2009 - 11:22pm.
Yes.100% correct. This has become a real good menace all around the world.So many people specially youth are waiting for jobs.This should be correct very soon.
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