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General Economy
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General Economy- “You must look at facts because they look at you.” Winston Churchill Who and what isn’t affected by the current economy and worldwide recession? Virtually none or nothing. Employees are losing jobs at enormous rates; the national unemployment number stands at 9+% and worldwide the GNP will be down at least 10% and some experts expect that to rise to high double digits. Homeowners, business’s, golf course’s, resorts, hotels’, factories, schools, and shopping malls are being foreclosed upon in record numbers and lenders & banks can’t keep up in selling the properties they’ve taken back. Companies large and small are losing business, cutting labor, production and new product development. The most human face to this crisis is the level of unemployment America and the G20 countries is facing. Without jobs, in the US, our neighbors are losing their houses right and left. Not only does that create catastrophic problems for those who lose their jobs. The consequences fall on the rest of our population as well. A fellow citizen who loses his or her job becomes at risk for not being able to continue to make their payments. If they can’t make their payments, there is a good chance their home will face foreclosure. When that happens we all lose, because foreclosures are driving the values of homes and other assets down by incredible levels. In some cities in the hardest hit areas, home values are plummeting by 70% or more. In terms of commercial businesses banks and the financial industries are probably most affected by the negative economy. By foreclosing on so many residential and commercial properties, lenders are having trouble moving all of the negative assets off their books quickly enough. And some assets are hard to value. There are other major industries being affected by the economy as well. Here are some key areas outside of banking, retail and financial that could be at risk. For each sector you’ll see how the decline in these specific industries is also impacting the housing crisis. 1. Healthcare- With people worldwide losing jobs and insurance, major and minor illnesses are being treated at hospitals. Care is provided regardless of a patient’s ability to pay. This is one reason why our nation’s heath care costs are the highest in any industrialized nation. Further, if patient’s do put their health care bills first, there is a significant chance their ability to pay their mortgages and other will be hindered. 2. Government- Local cities and municipalities are going broke. States such as California are billions of dollars in debt. The collection of tax revenues are declining significantly especially in the area of property taxes which are based on home values. Blight is occurring in many local towns with the number of foreclosures. Local governments are putting liens on properties based on non-payment of taxes which puts the government into the bad housing business. Germany’s news publication SPIEGEL reported, “The bailout packages aimed at shoring up financial markets in Europe are
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Transcript of General Economy
General Economy-
“You must look at facts because they look at you.” Winston Churchill
Who and what isn’t affected by the current economy and worldwide recession? Virtually none or nothing. Employees are losing jobs at enormous rates; the national unemployment number stands at 9+% and worldwide the GNP will be down at least 10% and some experts expect that to rise to high double digits. Homeowners, business’s, golf course’s, resorts, hotels’, factories, schools, and shopping malls are being foreclosed upon in record numbers and lenders & banks can’t keep up in selling the properties they’ve taken back. Companies large and small are losing business, cutting labor, production and new product development.
The most human face to this crisis is the level of unemployment America and the G20 countries is facing. Without jobs, in the US, our neighbors are losing their houses right and left. Not only does that create catastrophic problems for those who lose their jobs. The consequences fall on the rest of our population as well. A fellow citizen who loses his or her job becomes at risk for not being able to continue to make their payments. If they can’t make their payments, there is a good chance their home will face foreclosure. When that happens we all lose, because foreclosures are driving the values of homes and other assets down by incredible levels. In some cities in the hardest hit areas, home values are plummeting by 70% or more.
In terms of commercial businesses banks and the financial industries are probably most affected by the negative economy. By foreclosing on so many residential and commercial properties, lenders are having trouble moving all of the negative assets off their books quickly enough. And some assets are hard to value.
There are other major industries being affected by the economy as well. Here are some key areas outside of banking, retail and financial that could be at risk. For each sector you’ll see how the decline in these specific industries is also impacting the housing crisis.
1. Healthcare- With people worldwide losing jobs and insurance, major and minor illnesses are being treated at hospitals. Care is provided regardless of a patient’s ability to pay. This is one reason why our nation’s heath care costs are the highest in any industrialized nation. Further, if patient’s do put their health care bills first, there is a significant chance their ability to pay their mortgages and other will be hindered.
2. Government- Local cities and municipalities are going broke. States such as California are billions of dollars in debt. The collection of tax revenues are declining significantly especially in the area of property taxes which are based on home values. Blight is occurring in many local towns with the number of foreclosures. Local governments are putting liens on properties based on non-payment of taxes which puts the government into the bad housing business. Germany’s news publication SPIEGEL reported, “The bailout packages aimed at shoring up financial markets in Europe are
getting increasingly expensive. A creeping depreciation of currency is inevitable and state (local) bankruptcies can no longer be ruled out.”Chancellor Angela Merkel stated, “There is a rumor going around that nations cannot go bankrupt. This rumor is not true.’ The U.S. government has taken on a $10 trillion us dollars in bailout liabilities with still no evidence of the bottom being near.’ I think it’s about $1500 for every man, woman, child in the world. What happens when a nation cannot pay its bills? Government workers do not get paid. Government programs get slashed or simply fail to send checks.Pensions are not funded, then it starts printing money, and in the long run the currency becomes nearly worthless.
3 Entertainment- With people spending less on entertainment- employees from the travel, media, advertising, film and music industries are all at risk. With some of the G-20 and our nation’s highest paying jobs in media, hotels and resorts many employees are at risk in not paying high mortgage payments on their primary or secondary homes.
4 Hospitality- WORLDWIDE Discretionary dollars for everything from resorts and travel to eating in restaurants is put at risk in a recession. You see deals on everything from hotels, to airfare to 2 for 1 dinners because some hospitality companies trying to stay afloat during hard economic times. Many city streets and storefronts are littered with signs of businesses for sale or for rent signs in retail properties. Many commercial landlords and property owners are also at risk for losing their properties to foreclosure without paying tenants.
Recently US News and World Report listed 15 top companies which may not be able to survive this recession. They include:
• Rite Aid• Claire’s Stores• Chrysler• Dollar-Thrify Automotive Group• Realogy Corp.• Station Casinos• Loehmann’s Captial Corp• Sbarro• Six Flags• Blockbuster• Krispy Kreme• Landry’s Restaurants• Sirius Satellite Radio• Trump Entertainment Resorts Holdings• Bearing Point
Most all of these sectors or individual companies will also be affected by the real estate market. They will need to sell real estate associated with virtually any of their businesses.
If you are in need of selling your real estate assets fast, there is help. A local Southern California company, Terra Asset Management.com is an expert in liquidation risk and works to sell property, companies, and brands to interested parties. Operating in Palm Springs, Terra Asset Managers and its partners have unique foreclosure expertise and are the leading foreclosure specialists in Southern California and also operate through the United States. Terra Asset Management.com can cut your time of sale down. Equally important, Terra can limit your liquidation risk and most importantly Terra has the resources and the relationships to get your property sold quickly. Their secret, hire the best possible people to work for you. We surround ourselves with a team of people who can challenge your thinking and whose strengths make up for the deficits in the marketplace.
The 4 step process of Terra Asset Management.com takes the worry off your shoulders and handles all aspects of selling the property.
Step 1: Terra takes over the property so you don’t have to be involved, Deals with planning, code and local government for you.Step 2: They take the property and put in on the right path. They will handle all
repairs or other items that may keep you from selling it quickly.Step 3: Terra handles all of the day to day operations of the property including
maintenance and upkeep. We charge some of the lowest rates in the field.Step 4: Terra disposes of your property in the quickly and easily and puts the most
money back into your pocket.
Terra Asset Management.com is a full services real estate firm and has contractors, CPA’s, legal and other help that may be necessary for you to sell your property.In a tough economy, we have to make hard choices. Fortunately, when it comes to leadership in sales, the choice is easy, Terra Asset Management.comIf you are a multi-residential property owner or commercial property owner and you need properties sold, call the experts, Terra Asset Management.com. Charles Stewart can be reached at (760) 866-0021. Or [email protected]
