Wednesday, January 6, 2010

Americans more bearish on housing market

"just two percent (2%) of adults believe housing prices will recover in the next year. Seventeen percent (17%) predict it will take two years, while 15% are not sure.

But 65% think it will be three years or more before housing prices recover." (

The share who believed housing would recover in a year was 5-9% in 2009, but has fallen to only 2%. Those who believed that housing would not recover for three years or more was only 57-60% in 2009, but has risen further to 65%. (71% of men, 60% of women) (70% of investors vs 61% of non-investors) The trend shows increasing disappointment throughout President Obama's tenure, especially among investors.

Furthermore, those who make over $40k per year are more likely to be pessimistic and investors are more likely to be pessimistic (and thus disappointed with the economy and its effect on their personal finances). In other words, those more likely to vote and more likely to contribute to campaigns are more likely to be disappointed with the economy under President Obama and with the Democrat Congress. It also suggests that those more likely to research and follow the economy are more likely to be pessimistic... and reject media predictions of a "recovery".

Men were more pessimistic and the majority of men have decided to support Republicans over Democrats. Women, who are more likely to be undecided at this stage (according to Celinda Lake's polling), are not yet as disappointed. But looking at the long-term unemployment data and the wave of mortgages set to adjust to higher rates and likely default, they soon would be.

Undecided voters decide later in the year, when foreclosures, bankruptcies, and loan defaults will rise in the face of persistently high unemployment, underemployment, and earnings lagging the cost of living (and lagging increases in taxes). Also, those who remain optimistic about the economy are more likely to be government employees and more likely to be women. These may be more likely to be affected by the 2010 state government budget cuts.

Men in the private sector have already seen their unemployment rates rise faster than government employees or women. But this is because stubborn tax-and-spenders continue to prop up the government bubble. (see the concentration of jobs "created or saved" by the "Recovery Act" stimulus in state capitals and other centers of government.)

Privately-employed men suffered the brunt of job losses when the housing bubble and stock bubble and energy bubble and credit bubble collapsed, but government-employee unemployment may catch up once state governments FINALLY accept that budget cuts must be made. As tax revenues remain persistently depressed, the government bubble may FINALLY be allowed to pop.

American's dour predictions about the economy and the futility of (or even the harm caused by) government policies turned out to be more correct than the optimistic promises of the political class.

When the bearish predictions are confirmed by reality, disapproval of the Democrat congress will only increase.

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