House of Cards?

Yes, the U.S. economic recovery is quite fragile at the moment.  There are still major concerns regarding the debt restructuring in Europe. The war in Afghanistan continues to rage, as well as drain our economy of much needed resources both in dollars and in human capital. The Iranian nuclear threat is sending shivers throughout the world.  The partisan activities of Congress are an anchor on economic progress. All of these factors are clearly placing a level of uncertainty in the  minds of Americans.

However, the employment situation is clearly improving.  The stock market, which is often a reflection of confidence in the economy, or a lack thereof, has steadily improved and the volatility of the past few years, which is a genuine destroyer of confidence, has not been present.  Thanks to the strategy of the Federal Reserve, interest rates are at incredibly low levels.  Lenders claim that they are making capital available to borrowers.

While much of America was experiencing the “deer in the headlights” feeling during the first years following the banking crisis and subsequent stock market “crash," this too has passed.

Americans are beginning to feel more confident. While it appears that the luxury end of the retail market was the first to show signs of strength, this confidence seems to be moving down through the supply chain to include Americans at all income levels.  

One must remember that all housing markets are “local."  What is happening in Winnetka and Wilmette may be very different from what is happening in Toledo or Portland.  

On the North Shore, the spring real estate market has brought more new buyers to the market than had been seen in many years. These buyers are telling us that they are coming to the North Shore housing market because the combination of greatly reduced prices and incredibly low mortgage rates are providing an opportunity that had never before been available to them.  Many are also telling us that they are finally able to sell their houses, townhouses and condos in Chicago (or in Charlotte or Santa Monica), which seemed an impossible task just a year or two ago.

Yes, the world economic condition is fragile, but at the same time, it appears to be stronger than at any time in recent years. It’s a very deep hole and we are trying to dig ourselves out.  It took many years to get us in the trouble we were in.  

While the economic recovery is fragile and vulnerable to a variety of factors, we’re beginning to see the light at the end of the tunnel. 

House of cards? We hope not!

You can learn a bit about me on my web page or my Facebook page Meyersnorthshore. You can contact me at howard@thehudsoncompany.com.