Friday, January 8, 2010

Employment Outlook - Cloudy with a Chance of Meatballs

I have no crystal balls here or any other kind for that matter, but it’s still looking pretty bleak in general for the employment outlook.  Warren Buffet said the other day that, in the long term, he is positive (which is pretty easy to say since things generally go up over the long term).  But he feels pretty negative about the employment prospect for the short term.

I’m not basing this blog on anything that one person says, but if you’re here in California, you can just feel that things are still “stuck.”  My real estate clients are not around, and the few that are looking at properties are holding off for what I don’t really know.

I can argue that if we are at the bottom of the housing market, what difference would 3% in either direction really make in terms of one’s mortgage payments.  For every $10K that the price of a home changes, you’re talking about $55 difference in monthly mortgage payments. 

The average home price as of November, 2009 was $304,000.  3% of this sales price is about $9100 margin either way, or about a $50 mortgage payment difference.  So for people who genuinely want a home to be holding off for "the bottom" when the prices have come down so far already, it’s really foolish.  And again, the old saying is true, "no one rings a bell at the bottom of the market."

So this is my argument, but it doesn’t change whether people are actually buying or not, whether buyers have money saved up or not, and whether folks have jobs or not.  And it is quiet out there.  I notice a lot of people my age in the library throughout the day, in the post office, and not in restaurants and spending money (I think, because I’m not in any restaurants myself these days).

So the only way out of this for me that I can see is to gain employment somewhere.  That will give me the feeling of a slight bit of control at least.  Because when one is speculating whether the person met at an open house, or door knocking, or happening onto one’s real estate website, is actually going to take action and buy something, it’s just a numbers game with very low odds right now, which doesn’t give one a sense of basic self-sufficiency.

I do hope things get better soon, but I’ve got to get a job now so that I can buy myself some spaghetti and meatballs!