Home Buddies – Home Ownership Coach – Houston, Texas

Quarterly Economic Report, H.R. 6867, H.R. 1424

Part One

Over the next several weeks I will give you a three part analysis on what is happening within our economy.  My goal is to give you the straight “economic” implications on financial and real estate markets.  Today it is becoming even harder to discern what the true future holds with all of the negative media doom and gloom.   Gordon Appleby of The Wealth Club put it best when he said that CNN stands for “Constant Negative News!”  As always we want to avoid the media’s assertions and focus on the economic fundamentals when making our business, real estate and investment decisions.

Recession

As I stated several months ago we are now in a recession.  So it should come as no surprise to my readers that as of November 21st several key economic publications have stated that the recession started more than likely around a year ago.  That being said, what does that mean?  It means that the Obama Administration will likely champion a second economic stimulus package to help our country’s economy.

H.R. 1424

Signed into law on October 3rd, the “Emergency Economic Stabilization Act of 2008” has given some assistance to our ailing financial systems.  The Secretary of the Treasury has been busy supplying the financial system with some much needed liquidity.  However, many feel that these funds need to be directed toward helping home owners who are at risk of losing their homes.  It is safe to say that once the new Secretary of the Treasury takes office within the Obama Administration that these funds will begin to flow to home owners who are having trouble making mortgage payments.

Road to Recovery

More than likely the housing market will lead the way back to recovery for our economy.  This being said, the recovery will likely be slow and bumpy.  An indicator to watch for will be the inventory of unsold homes.  If foreclosures continue to tick up then inventories will swell and the recovery will be much slower than Americans would like.

There are several risks to the economic recovery, perhaps the greatest risk is a more severe worldwide recession.  In addition, if housing does not stabilize over the next 12 months we could be headed into an even deeper recession.

Next week we will shift to look at what is needed for economic growth and talk about how inflation is currently affecting our economy.  Finally, we will take a look at H.R. 6867 “Unemployment Compensation Extension Act of 2008.”

Cliff Pape
Home-Buddies