I have made this point on more than one occasion ~ 2010 will likely be the worst year of this downturn. Nearing the end of February with two months already behind us that prediction certainly seems to be on the button. This week we have had three updates from central agencies …
The first, informing us new home sales dropped 11.2% last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly half a century. This drop has pushed the median home sales price to $203,500, down 5.6% from December’s price of $215,600. This is not good news; prices need to go up in order to bring the hundreds of thousands of mortgages out there back into solvency and out of negative equity.
The second blow was job front news with jobless claims rising to 496,000, an increase of 22,000 when all indications from economists were pointing toward a drop nearer to 455,000. Maybe the message is that optimism is not going to get us out of this, only realism will help.
The third area is closer to home for me, in Texas. Statistics showed that home foreclosures for 2009 fell to their lowest level in three years. As a result most of the Texans I have spoken to are jumping for joy and pretending the crisis is over for them. Not so!! Look closer at the stats guys. If you go below the main headline you will find some much more worrying news. This is where realism needs to kick in. The ratio of Texans behind on their mortgage payments has risen to more than 10% for the first time. The inventory of foreclosed homes statewide has increased more than 25% in recent months. Almost 40% of the residential real estate sold in North Texas in the last quarter was foreclosed or distressed properties and about 15% of Dallas homeowners with mortgages owed more than their house was worth at the end of 2009. So unfortunately despite the headline statement the Republic is still in trouble!!!!
All is not however doom and gloom, so I would like to wish everyone a HAPPY NEW YEAR – AGAIN … Why? Well it is time for Chinese New Year celebrations. This year, 2010, it’s the year of the TIGER. (That’s the cat variety rather than the Woods variety.)
With all of the miserable news that we’ve had this week I thought the year of the TIGER was very appropriate. Last year the Tiger was even voted the world’s favorite animal by poll respondents in 73 countries. Tigers are the most powerful members of the cat family. They protect their territory with their life. They regularly pull together with each other creating a team approach to achieve their goals. Tigers also appear to be very intolerant of failure.
With these attributes and characteristics, what a perfect role model for the year in front of us. We all need to take on board some tiger tenacity, sharpen our claws, knuckle down, use our skills, common sense, understanding, compassion, integrity and toughness to work through the worst year of the worst downtown ITHOE and head for the light that we can see at the end of a precast concrete tunnel (manufactured by Hanson Pipe & Precast of course).
If we follow the Chinese example and embrace the year of this cat, we’ll all come through this, fitter, stronger and more experienced to enjoy the fruits of the upturn that will inevitably arrive, even though we can’t pinpoint exactly when. And it can’t come soon enough, especially in the Republic.
Tags: Chinese New Year, Foreclosures, Hanson Pipe & Precast, Mortgages, New Home Sales, Texas, Tigers, Unemployment
Some of the challenge we are facing in our path to recovery is “the next big thing” isn’t going to skyrocket on its own like we’ve come to expect. Most embrace “sustainability” as our next big thing and I happen to agree and hope it takes off. The concern is whether society, government, business or individuals have embraced that this one is going to take effort and commitment over the long term. This applies to both economic recovery and sustainability. Do we have the stamina and patience to see it through? Likely not yet, but we are going to have to learn. There’s nothing exciting about being stagnate anyway… bring on the tiger!