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Housing Predictions for 2011

Normally, I am not in the business of predicting trends, simply because I believe all real estate is local. However, due to the economic condition of the Country and World, I do believe 2011 will be a year that either makes or breaks the real estate industry in the next 3-5 years.

A Government divided:

It is my opinion that a divided Federal Government is a lesser of many other possible evils. As we learned from the first 2 years of the Obama White House, a Government who is unified under one party banner is a Government run amuck. The citizens of this great Nation saw laws pushed through that in a time of a divided Government wouldn’t of had a chance in their current form. To broaden the perspective a bit more, I see a divided Government as a check and balance on the party agendas and special interest groups. Granted, with the size of the Government we have now, we will always have corruption and back room deals but, it is fairly certain now, with debts at their current levels, our Country can’t continue with the size of Government we currently have. In other words, a small Federal Government means less spending, less debt and a better ability to route out corruption, prosecute offenders and return God given freedoms back to the citizens.

By now, you may be wondering what a divided Federal Government has to do with housing in 2011. I predict that as a part of posterity measures that will be introduced by Tea Part Republicans we will see a draw back if not a complete withdrawal of many of the current failed housing recovery programs. I don’t know exactly what the fall out of these programs will be but, I submit for your contemplation that, we will see an increase in foreclosure inventories. An increase in foreclosure inventories means further drop in prices and hopefully a bottoming out so that we can rebuild the industry.

Local Government Bankruptcies:

I really do believe that 2011 may be the year we see small local Governments fail and declare bankruptcy. We are see huge debts that are causing local Government to straddle the line of financial failure and continued debt spending. With continued public pressure and Federal Government spending cuts, many of these debt heavy local Government could find themselves with no options other than Bankruptcy. Local Government will cut all spending except for necessary public works, like utilities and law enforcement. As part of their local Government spending cuts, unions will find themselves in courts fighting tax payers for their pensions and services will suffer.

This scenario will directly impact housing because buyers will keep their money in their pockets due to the uncertainty that will be created. Housing prices will further drop, equity will be lost, foreclosure inventories will rise.

In conclusion:

For many of us, this sounds like a epic tale of the fall of a great nation in history however, for some of us, we are able to see the signs, read them and understand what they mean.

Granted, the future is never written in stone and we do live in a Country with the most resilient people in the World so, I am optimistic.

How can I be so optimistic you may ask, well………it’s because I know this Country has within it’s awesome foundation a faith in all that is good and therefore, an ability to make tough decisions that will put us back on the right track. In the meantime, it could be hard, it could get nasty, we may see our fellow man hurt and suffer but, we will unite, we will come together and re-learn what it means to be charitable, what it means to be close to family, what it means to look out for one another. I believe we are a divinely inspired Country and as these times turn our face back into the light of inspiration our minds will be centered on the greatness of God and the darkness of the future lights up and becomes much less daunting otherwise.

The catalyst for a man to make a permanent change is when he is on the edge of an abyss. The abyss seems to be coming more into view.

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