The last economic in the expansion in the United States was led by housing and housing related businesses.  Those business accounted for a large part of the of employment growth and  an increase in home equity fueled that expansion.   The Blog Calculated Risk reports that American Home owners borrowed 680 billion dollars of home equity in 2006 and 480 billion in 2007.  A trillion dollars can go along way to fueling an economic expansion Mardi Gras.  But the party is over and we are all suffering with the hangover now.  

The housing market peaked in 2006 and the housing related industries have  shed jobs.  As home prices have fallen the ability of home owners to borrow against their homes equity has vanished.  Instead of contributing to the expansion of the economy the housing market is the reason for it’s contraction.  Lets face it we went crazy.  We borrowed against the house put in granite counter tops and stainless steel appliances, bought a new mini van, a 50 inch plasma flat screen TV and went to Disney World.  The last one off Magic Mountain please turn off the light

Housing is what got us into the mess but it is not going to get us out.  And what is the really good news is that we do not need it to get out of the recession.  The US economy has staged an incredible turnaround in less then a year.  In less then nine months it has grown 11.3 percent.  And all this has happen as home values have continued to fall and consumer lending has declined.  People are still spending they are just being smart about it.

What industries are leading us out of the recession?  Well you have education and health care on the local front.  In addition industries that are tied to the global economy have come back. Commodities, energy, transportation and   manufacturing is growing again.  Exports from this country have risen 6 months in a row.  Low interest rates and government spending have helped as well.  Business services are adding jobs.  It is many small things that are leading us back to recovery. 

Americans have changed the way we spend.  We save for the things we want  and are spending less.   Instead of income going to tend debt service it is going to investment.  This capital investment instead of going into housing is going into improving infrastructure, new industries like solar plants,  updating existing facilities and manufacturing expansion.  The stock market is proof positive.  In 10 months it has risen over 50 percent from its lows back in March of 2009 .

There are 25 homes for sale in Morris Plains this month.  Only one home has gone under contract and that is my listing at 9 Cleveland Avenue Morris Plains, NJ.  There are two homes that are listed as a for sale by owner.  One is a great up dated  cape, 3 bedrooms 2 baths priced at 385 another is a ranch with all new baths and kitchens priced at 510.  If you would like to see them let me know.  I also have a lead on real nice center hall colonial on a great lot and will price in the high 600′s

Thanks for  reading Morris Plains Homes Blog and here is the quote: 

“While you’re saving your face, you’re losing your ass.”  Lyndon Baines Johnson