When Will the Economy Recover?

Recovery.  Some say that we have already recovered, some say that it will take until 2015, some say that we are headed for a double-dip.  It’s hard to say what will happen next.

Here are some thoughts on recovery.

Right now money is easy but credit is tight, another way to say this is loans are dirt cheap but they are hard to get.

Rates have been at historic lows for years, yet other issues seem to go unchallenged.  Community banks cannot get off their feet to lend again, large banks may have largely written off their losses and are getting back into the lending business but the small banking system is broken with 7,000 community banks that can’t extend credit because their capital levels are too depleted.

700 more banks are doomed to be closed down by the FDIC in 2011.

Let’s have a look at the negatives and positives for real estate.

Negatives: job losses, of which 2.2 million have migrated overseas, gridlock in Washington, cutbacks in state and local government, and currency wars.

Positives: pent-up demand, cheap loans, and the best housing affordability in 50 years.

With the latest moratorium on foreclosures and a probability of more moratoriums to come, James Saccaccio CEO of foreclosure data aggregator RealtyTrac says that foreclosures could drag into 2014.  This could continue to keep recovery down.

But it depends on how the foreclosures are released on the market.

Will they come in a  flood or a trickle?