Changing Demography and Your Future

In 2007 we had about $14 trillion of equity in our homes here in the United States. Today we have about $7 trillion. This essentially has halted Baby Boomer retirement because their wealth is in their homes. This fact crippled the economy of the southern retirement states.

In 2009 we discovered that we had allowed about 9 million mortgage loans to go south in the U.S.. Many of the loans, obviously, should not have been made in the first place.The big banks bought the bad loans with federal bailout money at a discount from the Feds and are foreclosing with a vengeance even though they promised the Feds that they would mediate with the home owners. Foreclosure, it seems, is more profitable than mediation. This process is holding the housing market hostage. That’s the bad news.

The good news is the housing market problem is getting cleared up and we are starting to see little rays of light here and there. With a little help from Attorneys General in many states and a shove from President Obama the banks should have this crisis cleared up in two to three years. Maybe even less. Once this occurs the housing market will return on steroids because there is so much pent up demand. Houses will sell, values will rise and new construction will start anew. Baby Boomers will finally be able to sell their homes and retire to the warm southern states.

This all bodes very well for the constrction industry and related trades. The people in the industry who have held on will print money. You heard it here.