Pundits Cannot Predict the Nearing of the End of this Foreclosure Related Crisis

Posted on March 31, 2009
Filed Under Foreclosure Homes | Leave a Comment

All the pundits agree – they cannot predict the nearing of the end of this foreclosure crisis that has brought about this recession. The prevailing recession is in its 15th month making it longer than all but two such recessions following the close of World War II. In fact all indications show that things are getting worse – the Dow is falling, jobs are disappearing and one eight of the homeowners of America are either in or about to fall into foreclosure.

The theory is that the economy goes through cycles and invariably recovers. The experts are pouring over statistics lying under the headlines to track the point when it will turn. Notice is being made of three markets – jobs, housing and stocks. No optimistic answer was got after peering into any section.

In February unemployment touched 8.1% – the highest in 25 years. 4.4 million jobs have vanished across the country from the time of the onset of the recession in the latter part of 2007. Early last year job cuts began in the housing sector. It was followed by the collapse of the financial sector battering white-collar workers. This was followed by lay offs spreading across all types of industry and income levels.

It seems that the job market will see more dark days ahead. Consumers are not spending and the credit market remains frozen. Experts opine that this year 2.4 million jobs will be shed. It would cause unemployment to cross 9%. This will be more than the figures of the recessions of 190-91 and 2001 but it will be less than 10.8% noted in December 1982. The job market will continue to hiccup for quite a few years ahead even if the economy starts to pick up. There is little hope that the unemployment level will drop to its pre-recession mark of 5% until 2013 according to the findings of Moody’s Economy.com.

Sophia Koropeckyj of Moody’s Economy is on the look out for two harbingers of spring – the start of companies beginning to hire temporary working hands and an increase in the number of working hours of the existing workers who are still clinging on to their part and whole time jobs. She feels that this will not be so till the middle of 2010.

The situation is really grim. The mean value of a house fell by 26% from what it was 18 months earlier according to the findings of National Association of Realtors. But that figure does not give the true complex figure.

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