We make predictions and projections at the beginning of the year. I remember predicting that 2011 is going to be another rough year for the housing market and that it would be a lot like 2010.

It is turning out to be worse than I anticipated. I did not factor in a state government shutdown or the increase in gasoline prices.

Home prices in my market hit a new bottom and are slightly lower than they were when we hit bottom in 2009. I don’t see it as a double-dip housing recession but as a market that was heading down before being interrupted by the homebuyer and seller tax credits of the last two years.

The lowest-priced homes are selling, and after looking at June numbers I have concluded that the peak real estate selling season in my market is over for 2011. Real estate is local and there are signs of recovery in other parts of the country.

Here in Minnesota our local economy is taking yet another hit as many state government departments and services have shut down. Our governor and state Legislature are having a standoff on the state budget.

Apparently, without a budget they can spend money to close the state but not to keep it open.

One would think that closing the government would save us all some money, but it does cost money to close it and reopen it. The government generates money through fees on everything from fishing licenses to the passes commuters buy to use the speed lanes on the freeway.

The state employs a lot of people, and many of them are out of work at the moment. Some of us may secretly resent them because they — unlike some of us — have health insurance, but they also spend money, buy houses and pay taxes, which helps us all.

The state lottery brings in money, but not when it is closed. A judge had to order the state zoo be reopened because without the revenue from visitors the zoo would not be able to keep going.

The Minnesota Department of Commerce is closed, and there is a notice to that effect on its website. Real estate, insurance and utilities are regulated by the department of commerce. Real estate licenses cannot be issued, transferred or renewed until the state goes back to work, and we don’t know when that will be.

We can likely go for years without any new licensees and still have enough people to sell real estate, but not being able to transfer licenses from one brokerage to another could be a real hardship.

My broker’s license was apparently renewed, but there isn’t any way for me or for anyone else to look it up because the Department of Commerce website, like many state websites, closed on June 30 and has been replaced by a page with a link to an emergency website that doesn’t provide much information but is much easier to navigate than the sites it replaces.

There is a trickle-down effect as state employees no longer go downtown every day to work and don’t buy lunch from the people who run the food stands or the local restaurants.

Small-business owners are already feeling the impact, and when they are negatively impacted they spend less money, which in turn has an impact on other businesses. There is no "us" and "them" here — we all contribute to the local economy.

State employees will likely cut back on spending until they get back to work, and having state parks and attractions closed during the height of tourist season is going to impact many businesses and ultimately the housing market.

There isn’t any way to know what else may impact the economy in the coming months. I stopped looking for signs of recovery in the housing market sometime last year.

I think it is important to stay focused on how to make money now. Who knew that we would still be on the road to recovery in the middle of 2011?

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