What a ride it's been since Sept. 11, 2001. Remember that eerie silence following the terrorist attacks on New York and Washington D.C.? I'm not talking just about the empty skies. I'm also referring to the total lack of commerce. Our economy had tanked. People were scared. Talk about no consumer confidence.
Fast forward a couple of years later and the economy had begun to recover. At first, the recovery was a trickle. By 2005, the trickle had turned into a flood, and the good times were back again. If you were breathing you qualified for a loan. Banks were throwing money out the door like candy. Homeowners were using their equity like an ATM card, buying Hummers, boats, exotic vacations, bigger homes and faster cars. Greed had become the drug of choice.
I knew it the day it happened. The day that we hit the proverbial wall was on Aug. 1, 2005. Home values stopped rising. At first they plateaued. Then when demand began to flatten, sellers began to ever so slightly reduce their asking prices to attract a buyer. Those in the business were hoping that there may be a baseline of value that would survive the slowdown, thinking that Phoenix had finally arrived as a New York, a San Francisco or a Los Angeles kind of metro. I kept hearing the lyrics "Slip sliding away." Well, we have been slip sliding away now for more than five years. It's been ugly. A lot of people got hurt and are still getting hurt. Is there an end in sight? I believe that in 2011 the answer will be "Yes!"
I believe that the first two quarters of 2011 will be marked by an uptick in trustee sales as the banks play catchup with those foreclosures that were put on hold by the paperwork scandal. In fact, trustee sales may reach record levels by March. This may be the crescendo of bloodletting as the last of those "red nickels" are sucked out of the real estate market.
At the same time people are losing their homes in record numbers, the unemployment rate will have begun to fall marginally primarily due to the recent passage of the tax bill crafted by Obama and the Republicans. By the time school is out in late spring, the local real estate market will be ready for a sizable uptick in sales and prices. By the way, people don't buy homes when prices are going down. The recovery will pick up speed when prices begin to steadily creep back up and buyers begin to panic thinking that they waited too long to make their move. By the way, people always wait too long.
By this time next year, our economy should be modestly improved from what it is today. The real estate market should have returned to some degree of predictability. Home prices should be on a continued upward trend, jobs more plentiful and consumer confidence much stronger. On the downside, I anticipate that interest rates will have returned to pre-recession levels and the size of our debt will have continued to rise. All of our problems will have not been solved but the carnage of the "Great Recession" will have abated.
Jon Beydler is a 32-year Valley resident and the former mayor of Fountain Hills. He lives in south Chandler.