The economy is in a depressed condition! (no shit Sherlock)
Some interesting facts:
In 2005 Realtors were very happily selling empty condos and houses by the millions to unwary investors. 27.7 percent of all homes purchased were for investment and another 12.2 percent were vacation homes. All together there were 3.34 million second-home sales in 2005 alone. The market share of second (and third and fourth and ad infinitum) homes rose from 36.0 percent in 2004 to 39.9 percent in 2005. That equals 10s of millions of unoccupied homes by the time the housing bubble burst in 2006 – 7.
So, there we were in 2005, millions of empty homes that nobody needed. Construction was booming. Money was easy to get.
The above chart shows how the recession affected the job market. Construction related jobs took a beating. Why? NO HOMES ARE BEING BUILT! (Do I have to tell you everything?)
This chart shows the states where construction employment was hit the hardest. It’s no coincidence that the states with the highest rate of construction jobs lost are also the states where the wildest housing construction and buying frenzy happened.
Now we have all those millions of empty homes that too much was paid for, and were unneeded and unnecessary to start with!! Foreclosures and bankruptcies left and right. WALK AWAY! START OVER! MAKE A NEW LIFE! ABANDON YOUR RESPONSIBILITIES AND COMMITMENTS!
Well despite what lawyers and others may be leading you to believe, dropping the ball on your financial responsibilities will bite you on the ass for a very long time.
Your credit score drops 60 to 100 points just by missing ONE mortgage payment. Talk to your bank quickly!! Foreclosure is a drop of 100 to 150 points for 6 to 10 YEARS!! At the end of that time the foreclosure will be removed from your credit history report, BUT it will still affect your credit score, preventing you from getting the best interest rates on future loans.
Okay, that is the bad news for the people who are considering a bankruptcy and/or foreclosure. I know some people have no options open to them and I certainly feel sympathy for them. This posting is not directed at you.
All those additional homes being dumped onto the market, at dollar amounts less than you can build them for, are preventing the housing market from recovering!
Bankruptcy should be made more difficult, if there is any possible way to keep the homeowner in his home it should be pursued. If the homeowner can afford to make the payments but wants to walk away because the home has lost value the homeowner should not be allowed bankruptcy. Good grief, it’s probably a nice home! You liked it originally! Think of your future!
For the economy to recover we need jobs. The primary jobs that were lost in this recession are in the construction industry. Until the flood of unwanted homes recedes there will be no demand for new construction. New construction means restored jobs, which means people with income, which means the ability to buy a home.
Kind of a Catch-22 situation isn’t it?
Keep that home if you can!!! Bite the bullet. The United States economy depends on YOU!!
to keep your home!!