Home Buddies – Houston Credit Repair Coach for Investors and Homeowners

Is the Party over? $850 Billion Stimulus

Well as we all know by now the party is over. However, are all the economic indicators pointing to a horrific 2009 or is there a silver lining within the data? Will the housing and credit crunch continue to hammer the national economy? Most of all, how will the Houston economy fair in 2009?

Housing and Credit
Well the battle lines are now drawn in congress, and housing and credit should benefit in 2009. Congress has expressed an un-relentless resolve to combat home owners losing their homes. In addition, the fed has committed to using all means necessary to lower mortgage rates. So what does all this mean? More than likely we will see the bottoming out of the housing market toward the end of 2009. This means that stopping foreclosures and stimulating the buying with low mortgage rates will eventually draw down excess inventory within the housing market. This will begin to bring about price stability in many markets. With price stability, buyers will feel more confident in the market and will see an uptick in buying activity toward the end of 2009 or early 2010.

Silver Lining $850 Billion
For better or for worse, no matter what your opinion, $850 billion being pumped into our economy will definitely provide a much needed lift, its simple economics. Some people may want to argue about where the money should be spent, but that is a political matter and has no affect on the real economy. Once these funds hit our economy it will provide much needed jobs, tax breaks, etc.

For those of you who are worrying that the government is just printing money, I understand how you feel, but there is no need to worry. Typically what occurs is, during economic down turns the government runs a higher than normal deficit. Then once the economic prosperity returns the government will then pay down the deficit. A great example is by looking at taxes. In order to stimulate an economy in a downturn, the government will typically lower taxes and once economic prosperity returns, the government then raises taxes to pay down the deficit.

Houston Economy
Houston will finally experience a slow down in 2009. Many oil and gas projects have been shelved due to rapidly falling oil and gas prices. In addition, a key indicator for the oil and gas industry is rig counts and we are seeing a reduction in active rigs across Texas. The good news is that the medical center continues to expand and is doing well which should provide a cushion for the Houston economy in 2009. Overall housing sales in 2009 will be slightly positive or break even for the year. All the while, the rental markets will see a boost due to the credit crunch.

2009 will be a cautious year, but toward the end we should see the light at the end of the tunnel.

Cliff Pape

Home Buddies