Two business days after the bailout became law on Friday and the market continues to be in turmoil. As I write this, the DOW is down 508 points for the day and is sitting at 9447. Obviously the markets have not responded as quickly or as positively as everyone had hoped with the news that the federal government was going to step up and purchase many of the bad (or toxic as they now seem to be referred to) mortgages that have overwhelmed the system. Like the constant national bad press about housing before it, the constant “the sky is falling” blow by blow coverage continues to elicit at best an unease and at worst near panic from the public. The 24 hour news cycle along with the Internet allow us to scare ourselves day in and day out.
I read recently that the U.S. consumer spending is responsible for approximately 2/3 of our gross domestic product. This is you, me, our friends, family and everyone else going out to the mall, dinner, vacations, buying houses and cars etc. spending spending spending to make the world go round. With the flood of information about unemployment on the rise, bank failures/buyouts, Wall Street bailouts, a presidential election looming in less then 30 days & consumer spending has ground to a halt. I also saw that oil closed yesterday at less then $90 a barrel, $87 as I recall. Can you imagine the meeting that OPEC must be having to lure us back to the pumps?
What does this mean for us? Well, firstly everyone needs to pause for a moment, take a deep breath and realize that we will get through this. The sun will rise tomorrow, our money will still be in the bank, grocery stores will still have food on the shelves. That we are in an unpleasant economic time is undeniable, but we will come out on the other side and I am a firm believer that this will occur sooner rather then later if we can keep our heads about us. Not only that, but we need to help others keep as calm as possible. Boise is still getting good marks in the press, recently making the top 25 most appreciating markets on housingpredictor.com. We enjoy a fantastic quality of life, affordable cost of living, and while we would all wish for a better performing real estate market we really have been spared from the worst of it. Having missed out on the hyper-inflation of many neighboring, larger markets we now have a smaller percentage of short sale and REO’s to deal with and property values have not fallen nearly as far or as fast as they have in California, Nevada, Florida and others.
While the turn around might not happen today, it will happen. The market will recover, property values will rise and the economy will stabalize. It won’t happen as quickly as anyone would like (ie months ago) but if we can hold on, keep calm, and ride it out… we’ll be ready to enjoy the better times that follow.
