Financial Problems on Wall Street – How far will the Effects be Felt?
Clearwater, Florida – Business Week‘s article today reminded us that even though Clearwater is a long way from Wall Street the effects will be felt in almost every town because “from CEOs to security guards, the financial, insurance, and real estate sectors employ approximately 9.8 million people in the U.S. alone, nearly 7% of the entire American workforce, and their spending potential is even greater.”
We’ve seen the impact on the 9000+ REALTORS in Pinellas County alone – many of whom bought real estate investments themselves and now are facing short sales and foreclosures. These Pinellas Realtors, like so many euphoric buyers in the height of the housing boom are reminded or the realities of the principle or “risk and reward” and the fact that markets will not always be rising.
Business week reports that these 10 towns have a higher percentage of people working in these industries so it’s easy to see why they may feel the effects of the Wall Street Bailout more than most.
Towns with High Percentage of Real Estate / Financial Industry Professionals
- Bloomington, Ill.: 26.31 percent
- Hoboken, N.J.: 23.33 percent
- West Des Moines, Iowa: 22.15 percent
- Garden City, N.Y.: 20.22 percent
- Summit, N.J.: 19.74
- Westport, Conn.: 19.39 percent
- University Park, Texas: 18.83 percent
- Wethersfield, Conn.: 18.73 percent
- Mountain Brook, Ala.: 18.66 percent
We’ve exprienced what extra supply and reduced demand can do to a local market over the last 2 years here in Pinellas County. For example, we saw Clearwater Beach overbuilt and redeveloped IMHO (with condo conversions on every corner) to exceed supply which has had a dramatic impacts on prices.
Today when the House of Representatives did not pass the $700 Billion bail out the stock market reacted dramitically, dropping 777 points, the largest single drop in one day. The harsh reality for all of us is that they are reporting we all lost ( if you have a 401K or any money in the market) because the loss in value of the stock market is estimated at over $1 Trillion – so doing nothing was not a great solution.
I hope our Congressional leaders can craft a solution that holds failing businesses accountable (and protects capitalism and free markets) like we do homeowners. We see people everyday who have fallen on hard times and when they are selling their home and come up short – more often than not, they are having to sign a promissary note to repay this debt in the future.
Accountabiliy – Why shouldn’t Wall Street businesses be held to same standard as You and I?
Much has been discussed about how we got here…now I’m just happy to say while none of this news is rosy…it’s nice to NOT see Florida real estate on a Top 10 list of cities primed for real estate hard times for a change. We are actually seeing an increase in real estate activity in Pinellas County and we have several homes in escrow and closings this month. We are finding that the overall number of homes for sale in Pinellas County has dropped which we believe is reflective of the fact that fewer sellers are just “trying” the market – we now see more realistic sellers and buyers in our marketplace – the biggest challenge right now is that most of the homes for sale are short sales or foreclosures (so the banks are playing a big role).
We have a homebuyer that is still waiting on a short sale approval ….we’re heading into month #4 and we’ll have to see how the bail out effects the bank’s motivations to move properties off their books NOW or will they HOLD them untl the market improves. Last time banks got an infusion of cash from the govenment we found it actually lowered their motivation to move these local properties – which is why buyers best deals may be those that are out their now.
Well if you are a buyer sitting on the fence – you may want to take a hard look at the Clearwater beach condos and Pinellas County home bargains right now or you may miss the best buys we’ve seen in years. Call us at (727) 710-8036 or Search Pinellas County Homes for sale right now!
