Unemployment's Effect on the Lingering Real Estate Crisis

Submitted by Jen Jones on Sat, 06/18/2011 - 10:21am

Unemployment's Effect on the Lingering Real Estate Crisis

It’s no secret that a big reason for our country’s lingering financial malaise is the real estate market’s seemingly unending mortgage crisis—forcing many Americans out of house and home while also contributing to a bleak economic environment for home purchases, investment and spending.

But along with the knowledge that the mortgage servicing industry foreclosed on more than one million homes last year and is on track to do better in 2011, comes more bad news for the beleaguered economy: high unemployment is now further dragging down the housing market and subsequent prospects for our country’s economic recovery.

This news comes according to a new report from The Huffington Post. “Home sales are being dragged down by the weakness of the labor market and the number of Americans who have grown too discouraged to look for work, economists say. In previous recoveries, the housing market has sometimes buoyed the economy, creating new jobs and driving economic growth. This time, however, the housing market is now lagging behind.”

The market is lagging in the sense that despite growing by some 120 million people in the past fifty or so years, the U.S. is now home to houses selling at just half the pace they were in 1963. This relationship between a bad housing market and a weak labor market reveals those not currently in the labor market are not looking to invest in real estate—an investment that could get the economy back on track, and, ironically, could get companies hiring again.

As HuffPost writes, “The point is simple: while the working age population is steadily rising, the size of the labor force is actually shrinking. And those Americans who have grown so discouraged that they have given up looking for work -- around 4.9 million as of last month -- are unlikely to be in the market for a house. With construction for new homes all but coming to a halt in February, Americans are on track to buy fewer new homes than in any year since the government began keeping data almost a half-century ago.”

The southeast region has been particularly hit hard by the housing crisis. In fact, North Carolina was one of these states most affected by the cost of foreclosure. According to RealtyTrac (via the Charlote Business Journal), the Tar Heel state’s foreclosure tally rose in 2010, with one in every 105 households in North Carolina in foreclosure last year, up 41.5 percent from a year earlier. That amounts to 40,151 NC homes facing foreclosure last year alone.

Many of these foreclosures could have been prevented with the assistance and advice of an experienced bankruptcy professional. In many cases, personal bankruptcy provides a proven solution to the foreclosure process, allowing families to create money for their mortgage by discharging unsecured debts; as well as giving them the safe and sure opportunity to stop the foreclosure process and start the conversations for re-building their lives—whether in this home or another they can better afford.

So, do you want to avoid the stops and starts of the foreclosure process altogether?  Or are you unemployed and looking to end the cycle of the economic malaise? Join the millions of American homeowners who have found immediate assistance and a more permanent solution to keep their hard-hit homes. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-919-646-2654, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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