I love it when I read these types of headlines.
I always get a chuckle and say "So, what did you expect?" The $ 8,000 home buyer credit was not renewed.
FHA, Freddie Mac and Fannie Mae have tightened lending requirements.
The "BIG BANKS" are imposing their own ridiculous rules on top of the government rules.
And you expect the housing market to thrive.
To quote a cartoon character, "DOH!" Here are some of the particulars in the story: The U.
S.
Census Bureau reports single family housing starts in June fell by 0.
7% to a seasonally adjusted annual rate of 454,000.
The U.
S.
started 1.
47 million in 2006 before the bubble burst.
The article goes on to claim that a variety of factors have led to a flagging confidence including a sluggish labor market, global turmoil and falling stock prices.
I find it amazing that these so called experts in Washington and New York are clueless as to why we are in trouble on all fronts.
Let's take the labor market.
I'm no economist or Harvard scholar but I can sure figure out why the job market is in such turmoil.
How about the constant barrage of criticism, rules and regulations that keep CEO and the local business owners guessing "what's next" Over the past 4 years the auto industry, banking, financial, and insurance industries have been terrorized by Washington and special interest groups.
They have to explain everything from CEO pay to why they're not being green enough for the environmental groups.
Don't get me wrong, Wall Street and the banking sector went on a GREED spree like none in history.
But with that said, all of the banking and financial sectors have been placed under government rule with all kinds of draconian regulations that have stifled creativity and confidence.
Washington has taken their typical reactive and not proactive stance.
Now let's take business, especially big business.
They have tax incentives to take jobs overseas.
Does it make sense to anyone for businesses to be laying off people here and exporting jobs elsewhere? Obviously it makes good business sense.
The biggest complaint is that taxes overseas are better than and not as high as the U.
S.
This might be the case but I have seen some reports that show most major companies pay very little federal income tax and most get a major credit.
So, is it really taxes, or could it be something else? Cheap labor in some third world country may make the quarterly P and L look good for stock holders but eventually that catches up to you when no one here has any money to buy your product.
Global economic turmoil and falling stock prices are all a factor of Governments around the world becoming so big and cumbersome they stifle growth.
In some countries the retirement age is 55 and then people live off the government dole for the rest of their lives.
Tax rates in some countries are in the 80% range to pay for all the government social programs and an ever increasing portion of the population doesn't pay taxes at all (sound familiar?).
And you wonder why Europe is on the verge of collapse.
Is this a model we want to follow?? Back here in the US all we hear from our leaders is negativity.
Words matter and you have to understand they say them more for political reasons.
A scared population is a compliant one that will agree with your political ideas.
And this has worked well: think 9-11, war in Iraq, TARP Stimulus 1 2 or 3 (I forgot, they keep adding them on), saving GM 'for America', and the list could go on.
In all of these events our leaders increased the fear factor to new heights making people believe if they did not go along all hell was going to break loose and we would all be out on the streets.
Americans and most of Europe are paralyzed with fear escalated by our elected leaders.
The job market and the housing market won't turn around till Main Street starts to feel good about its future.
So what does this mean for Real Estate investors? You need to pick your markets very carefully.
The best markets may not be where you are investing now.
For example Florida, my home state, is very anti business.
The Government seems to go out of its way to discourage business from moving here.
They want tourism, service jobs and retirees.
That is living in the past.
We need high paying good quality jobs if Florida is to survive and thrive in the market place.
On the other hand, just to our north, Georgia is grabbing every job that brings in good pay, health care and is a asset to the community and the State.
Companies from all over the world are signing lease contracts and purchase contracts and plan to hire tens of thousands of Georgians.
Both states have housing problems and job losses but one is being proactive and the other is sitting on South Beach having a cold one and taking in the sights!!!Which state will improve faster? All over the country this is being repeated, with some states fighting for every job while others are living in the past.
There have been a number of articles in national publications that more and more companies and people are moving to Southern and Mid Western States.
Don't believe it's because of the weather.
Northern States and Western States are still living in the 50's and 60's mentally when government was supposed to know what was best for the people and the business community.
They are all super high tax states and still not able to see what their problems are.
They are all on the verge of bankruptcy and they blame everyone but themselves.
Think California, New York, New Jersey and any one of the New England states.
So as an investor you must really do your homework before you invest in an area especially if you are not from that area.
What was a good bet in the past might not be safe any longer.
Due diligence is more important they ever.
Take the extra time on this part of your Real Estate business and big profits will come your way.
Because the rest of the world is scared to death and can't or won't make decisions so profits are there for the taking.
You just need to have courage to go where others are afraid to.