As realtors, we have found that the main factor in whether a family can buy a second home here at the Jersey shore is job stability. If a family has a solid income that will not be affected by a cut in salary or loss of job, they seem willing – even anxious - to take advantage of the incredibly low real estate prices and interest rates.
But should their job be iffy, it’s better to sit this one out. Why buy a vacation home if in the next year it becomes too much of a financial burden and they end up in foreclosure. Not only will their credit be ruined, but their shore experience will leave a lasting negative impression and they may never enter the second home market again, even in good times.
Their are currently 15.4 million unemployed Americans and the jobless rate is hovering around 10%. As always, these numbers do not include folks who have literally given up on ever getting a job and dropped out of the work force. A record 5.9 million Americans have been out of work at least a half year as 7 million jobs have disappeared since the recession began.
The normal unemployment rate is about 5.5%. Experts expect that the rate won’t return to that range until 2015 or so. Job creation is the key. In the last 10 years, from 1999 to 2009, the net gain in jobs is only about a half million, thanks to the loss of those 7 million jobs. The previous 10 years, 1989 to 1999, saw 21 million jobs created.
Another factor in the job market is that many Baby Boomers are not retiring, but instead are staying in the work force in order to afford to live more comfortably. This leaves the younger and less-skilled workers on the short end of the stick.
So what to do?
The federal government needs to create jobs. The recent infusion of money into infrastructure, mostly highways, really didn’t employ that many people. Material costs – asphalt, concrete, steel, heavy equipment, etc. – ate up much of that cash infusion.
Roosevelt had his Civilian Conservation Corps (CCC), which pulled many through the depression by creating labor-intensive jobs (meaning more people than machines). Why not get something like that rolling, where people of all skill levels can clean up roadsides, do much-needed maintenance work at state and national parks, thin underbrush in the forest fire-prone West.
Let’s prioritize solar, wind, and water power, offering generous subsidies and tax breaks to companies that manufacture and install these alternative power sources. And let’s clean up urban blight, by demolishing abandoned buildings and clearing vacant lots. That could be followed by building urban housing – but not “housing projects” – that would not only create jobs but upgrade people’s living standards.
When the government coordinates with private enterprises to create jobs, our economy will turn around in a heartbeat. It’s that simple. Are we asking for too much?
- Mountain Man and City Girl