For those of us who work in real estate, when we hear that question it feels like we're wearing night vision goggles and standing on the prow of the Titanic while the Captain shouts down "Do you see anything ahead?". We're shouting back, but he can't hear us.
Since December 2006, 170 mortgage lenders have shut down. The job loss involved in that is simply staggering. Many of these companies have anywhere between 100-500 employees, some are much larger. Assuming 300 as an average, that would mean at least 51,000 people have lost their jobs since December 2006. If GM or Ford fired 51,000 people it would be front page of the New York Times, but because the losses are spread over 170 companies no one notices that they're all in the same industry.
Here in Pittsburgh, the real estate market never had a "bubble". Market values remained steady and quite low throughout the time the bubble was inflating elsewhere. Over the past six months the market for $200k plus homes here has completely collapsed. Today there are 9654 single family homes for sale in a county with a population of 1.2 million. That is 1 house for sale for every 124 people in the county. This is the same ratio many "bubble" markets experienced when the bubble first started to pop. Again, we're not talking Southern California or Miami here.... this is Pittsburgh. Now wait till January when many of the adjustable rate mortgages sold in 2003 being to adjust and the people who are just making it suddenly see their payment jump by $300 a month. The foreclosures will start in mid June and hit record levels in late summer early fall. For those that can avoid foreclosure, that $300 per month has to be taken out of the economy. Watch sales of vacations, automobiles, appliances, computers, and home improvement supplies all tank.
Imagine how Joe and Jane Suburb are going to feel in October when their McMansion has been foreclosed on, they can't buy that new truck, they couldn't go on that vacation they took every year.
By next November it'll all be over but the shouting and who are they going to blame when they go to the polls?