Recession + Lack Of Job Creation = Housing Crisis?

October 4th, 2011 by Crystal Beran| Posted in Apartment Market Info, Apartment Marketing, Multifamily, Multifamily Foreclosures, Political Corner, Rent Increase Watch 2011, Rent vs Buy, Weekly News Update | 1 Comment »

The job-creation plan that President Obama is pushing congress to pass may have some great ideas about how to help this country and its citizens climb out of the giant hole of debt we’ve all fallen into. It does not, however, address one of the biggest problems that the nation is currently facing: the housing crisis.

Economists agree that a big part of the economic crisis we’re in is connected intimately to the housing crash. As homes lost their value and as people faltered under home debts they could no longer pay, jobs were lost and the entire nation’s economy suffered. Despite this clear connection, not much is being done to help former homeowners recover. Likewise, not much is being done to keep current homeowners who are still falling behind on their payments from falling into the same trap.

Many of the jobs initially lost in the economic crisis were closely related to the housing market. People who worked in construction lost their jobs when the construction of new homes dropped off. As fewer people were able to buy new homes, industries that marketed goods to home owners also suffered. This domino effect eventually reached nearly all industries across the nation and also adversely affected the economy abroad.

Fixing this troubled economy is not an easy task. Economists and lawmakers disagree about how to go about fixing the problems that we all face and the argument seems all but impossible to resolve. There are many different issues and addressing one of them will not necessarily fix the others.

That said, one area of the economy that definitely deserves more attention, especially when discussing a plan to create more jobs across the nation, is the housing industry. Directly addressing the housing problem may be one way to solve many of the nation’s economic issues, especially given that this crisis caused so many of the problems that we are currently facing.

The government has spent a great deal of resources bailing out large banks after the housing crash. These handouts were justified in that they prevented many banks from going under. The failure of banks was a huge contributor to the Great Depression, a scenario the US Government was right in wanting to avoid again.

Obviously, banks were not the only entities damaged by the recent housing market crash. Individuals lost their savings, their belongings and then their jobs as the economy went from bad to worse. In many parts of the country, people are still in danger of losing their investments and the job market continues to hover at a national average of about 9 percent. While there are individuals that do receive government assistance as they struggle to pay their mortgages and hold on until they can find new jobs, the vast majority of struggling Americans receive very little or no assistance. Obama is, of course, aware of this problem and has stated that he intends to keep “responsible homeowners” from losing their homes, though an action plan for doing so remains elusive.

And the question remains, with such a damaged economy, where do we put the first band-aid when trying to quell the financial bleeding?

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