A lot has happened since I’ve sent my last newsletter, and the majority has been very good.  Especially since the first of the year there have been some very encouraging signs of recovery.  But the economic hole we are in began being dug 20 years ago, when credit of all types became much more readily available.  There is no silver bullet that is going to turn things around, and we are going to have to scrabble our way out of this hole, a little at a time.  The good news is that this process is well underway.
The most encouraging sign most recently in headlines is the unexpected rise in pending home sales (nationwide) in December.  The majority of these pending home sales are foreclosed properties in California and Florida.  First, it’s vacant, foreclosed homes that are currently glutting our market.  Reducing not only bank-owned inventory, but vacant inventory is essential to turning the tide on our current crisis of high levels of housing inventory.  Second, Portland nearly always trails California in trends, so we can expect to see increase in activity locally in the coming months.
Another very important factor in our recovery is the movement of mortgage-backed securities.  Most people don’t necessarily need to know what mortgage-backed securities are, but you should know that banks need to sell them to be able to make more new loans.  The federal government will be purchasing some of these securities, which is great, but more importantly, they are just starting to be traded again out in the market.  Liken the situation to a person who needs a respirator to survive, but then slowly is able to start to breathe on their own.  Breathing on your own is always preferable!
More subtle signs include slowly decreasing home inventory, real estate professionals adapting to the market and finding new ways to sell homes, and banks finding ways to keep distressed homeowners in their homes through loan modifications and other arrangements.  And believe it or not, home prices coming down to more affordable levels in combination with low interest rates has stimulated the local market significantly since mid-December.
Not even most, but virtually all the economists that I keep tabs on are all in agreement that we are either at bottom, or very near it.  It seems since the recession became “official” we have let out a collective sigh of relief.  Literally everyone is talking about how to save money and what they are doing to lessen their expenses.  Just look at the headlines in line at the grocery store.  A crucial component to our recovery is awareness; an economy built on credit is like a house built on sand….and we will need to re-build our economy on more solid ground.

Opinions expressed in this article are the opinions of author, and not to necessarily the opinions of Meadows Group Inc.
All rights reserved on all original content, non-original content is given credit | Michelle Berry | 2009