The Recession is Over: Should Someone Inform the Real Estate Industry?
By: Robert J. Strachota
The National Bureau of Economic Research recently announced that the recession ended in June of 2009. However, most real estate professionals, including the majority of our clients, report that economic conditions for the real estate industry have worsened.
On a positive note, of 170 major metropolitan areas in the United States, the Twin Cities ranks 66th on the affordability index for residential housing. The affordability index is a ratio which compares housing costs for median-priced existing homes to income levels. It gives us a good indication of which markets are over-priced and, therefore, subject to additional decline. Currently, mortgage costs and household income in the Twin Cities are relatively well-balanced. The residential market is unlikely to experience further decline. However, the commercial markets are much less stable and, depending upon the submarket in question, declines are expected to continue for the near term.
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