Almost 3 years Since the Great Recession Began

December 14th, 2010

Almost 3 years Since the Great Recession Began

I look back to 2009 when the Steamboat Springs real estate market was drying up. Talking to other agents there was talks about things getting better around late 2010. Well, seems many were wrong. But one thing that is showing signs of improvement is consumer spending.

“It has also been, as the Commerce Department reminded us this morning, three years since retail sales went in the tank. As of last month, they’re back. The Commerce Department said today November retail sales are basically where they were in the fall of 2007. Stores are loving that news as are economists. Consumer spending — as we’ve told you many, many times — is a huge engine for the American economy. ”

So we’re back to spending at 2007 levels. But I assure you, real estate values in Steamboat and Routt county are no where near 2007 levels. In looking at some properties around Steamboat Springs, it starting to appear that today’s home, townhome, and condo prices are somewhere around 2004-2005 prices. Meaning if you bought a condo in the Villas back in 2005, that same condo today is around the same price.

But again, there are signs of improvement. Yet more jobs and consumer confidence is needing a boost to really get things going. Many feel employment is the key to our recovery.

Real Estate Outlook: Employment Key To Recovery
by Carla Hill

After an unexpected rise the week prior in the unemployment rate to 9.8 percent, some economists were surprised when the Labor Department reported last week that new jobless claims fell by 17,000.
According to the New York Times, “job creation is expected to receive a lift from a compromise deal struck by the Obama administration and Republican lawmakers [last] Monday to maintain all Bush-era tax cuts through 2012, extend emergency unemployment benefits and cut employee payroll taxes by 2 percentage points.”

These tax cuts include a wide array of credits and deductions that could help reduce the burden felt in nearly all households.

Jobs, however, are essential to our economic recovery. And Federal Reserve Chairman Ben Bernanke reports we may be years from having normal unemployment again. Normal unemployment ranges from 5 to 6 percent. The economy, he says, is growing at an annual pace of around 2.5 percent – too slow of rate to reduce unemployment.

Unfortunately, the National Association of Business Economics reports that GDP projections for 2011 remain sub-par. Concerns over the federal deficit and unemployment continue to chip away at consumer confidence. And while spending is up 2.5 percent over last year, this year’s holiday retail sales are still weak.

This is part of the reason that the industry leaders are such strong proponents for Obama’s Deficit Commission saving the mortgage interest deduction (MID). The National Association of Home Builders has now added their support, saying, “The consequences [of threatening the deduction] would be devastating for home owners, the housing market and the nation’s economy.” Supporters believe this deduction is a needed incentive to bring buyers to the market once again.

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—For more on this topic or questions regarding real estate in Steamboat Springs, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com. I will answer your post or email promptly with candid and informed answers. Click here to view all properties in Steamboat Springs in “real time” — This is one of the few real estate sites showing all foreclosed and all short sale listings in real time and updated every few minutes.

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