Hartselle’s economy faring well

By By Mike Tarpley
At a time when the economic picture is uncertain for 2009 Hartselle’s economy is growing.
There is good reason to believe the housing market has also turned the corner. Housing in some of the country’s hottest markets during the boom-California, Florida, and Nevada among others is once again starting to experience gains in home sales. The reason is increased affordability and low interest rates.
Existing single-family homes have come down an average 20 to 30 percent in these hard hit markets in the 12 months preceding September 2008. This has compelled home buyers sitting on the fence an incentive to buy.
During the 2001-2003 downturn the economy shed some 2 million jobs, yet existing home sales rose from 5.2 million to 6.2 million units. The fact is home sales can improve even in a recession if affordability improves. After all in a deep recession, I would expect that 93 percent of the workforce will retain their jobs.
The federal government has also helped with its increase in the conforming and FHA limits and the enactment of the $2,500 first time home buyers tax credit.
Even if the economy stays in the doldrums, it’s likely that existing home sales will remain on an even upward trajectory. New-home sales will continue to struggle because of the inventory.
Home sales have historically been the driving force to push our economy back into a growth mode in a downturn. Given signs that improving affordability and low interest rates are starting to drive home sales gains, the signs are good that home sales will spur the next economic recovery.
Mike Tarpey is an agent with ReMax in Hartselle.