The unemployment rate in Nevada hit 12.3% the other day and I have read that it is at or near 15% in Michigan. Nationally we have hit a 50 year unemployment high that is climbing, and there are nearly a million and a half people not counted as unemployed because they haven’t searched recently for work.
When you consider the fact that the unemployed are staying that way for a longer and longer period, you can begin to understand why polls are saying that there is an “erosion of confidence” in our economic system.
The problem is that there are no real signs that things are turning around. The Press wants to jump on anything. If a dog barks, or home prices stabilize in Beverly Hills, it must be an economic recovery. In reality things are likely to get worse in 2009 with continued housing market problems and a new wave of commercial defaults and foreclosures coming our way.
No one really knows if 2010 will end this down market or if it will take much longer. Real estate cycles can last decades. In Las Vegas we have been told that there is a 5 year supply of commercial buildings, condos and homes that will have to be absorbed in order for us to return to normal. Unless we see a mass exodus from California, which is not entirely unrealistic, it will take much longer than most people are willing to admit.
I’m not trying to be negative here, just report some dire information about our economy and the direction in which it is headed. I am looking forward to the time when things get better, but it appears that we have to prepare for more pain not less.
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I’ve worked in the film industry in Toronto, and I was constantly surprised to see how much downtown office space was available for location lunchrooms or holding areas. There are so many entire floors just sitting there empty.
My impression is that generally, things in the real estate market aren’t as bad north of the border as they are in some areas of the US, but I do notice that some of the condo projects have been scrapped in the last year or so.
I totally agree with what you have said about the signs the economy has been showing, and the rate at which the jobless figures have been climbing.
A silver lining, if you like, comes in the results announced by BofA and Citi 2 days back. Let’s sincerely hope this faint sign of reversal is sustained, and spreads to other industries as well.
I don’t think those bank profits say anything about how the economy is doing. It’s just another one of those things the Press points to, a chance to say things are getting better somewhere. The economic reality totally conflicts with bank profits. When they can tell me that there are fewer unemployed, that home values are not in free fall and that the the national debt is going down big time . . . that would give me some peace of mind.
With an increasing number of people, the government is surely having difficulty with regard to unemployment issue. There will be less pain if we do something now. I guess, for those who are unemployed, they should think of plan B, like starting a small business. What do you think? I’m sure you don’t want to be included in the increasing number of unemployed, right?
So if those condos and houses are sold quicker the sooner the economy will be back to normal right? Then the main problem would still be on people losing jobs. If they have jobs then they have money. If they have money then they’ll be sure to get a home of their own.
Nice, always expect the worse. That’s good actually because the last time that I watched TV with an expert economist, none of the things he predicted ever happened.
i think the year 2010 will be a bit better compare this year..that is only my gut feel on this crisis..after the bail out for some big companies if this will push through..