“The Biggest Slump in US Housing in the Last 53 years”, is the viewpoint of Angelo Mozilo, the CEO of Countrywide.  ”I’ve never seen a soft-landing in 53 years, so we have a ways to go before this levels out.”

The spill-over will be vast.

Let’s start with the employment effects of housing.  Up to 30% of the employment growth in the last three years was due directly and indirectly to housing.  The direct effects are jobs lost in construction, building materials, real estate brokers and sales agents, and employees of the mortgage finance industry.

The indirect effects imply that the role of housing is even larger than 30%.  The housing boom led to a boom in consumer durables spending on home appliances and furniture.  There are also indirect effects of the housing bust even on the purchases of motor vehicles.

As the Financial Times recently put it, the sharp fall in the sales of Ford’s pick-up trucks is related to the housing slump as such trucks are widely purchased by real estate contractors.  And in Q2, real consumer durables (that include both cars, home appliances and furniture all related to housing) already fell, consistent with the view that we now have a glut in the stock of consumer durables.  Thus, as the housing sector slumps, the job and income and wage losses in housing will percolate throughout the economy.

So remember…
 

Be smart about real estate investing by following the 4-step recipe:

1. Buy discount real estate property - foreclosures, pre-foreclosures, tax sales, real estate auctions, real estate repos and other distressed-seller opportunities.
2. Consider commercial real estate investments - apartment buildings, retail centers, storage unit facilities, office buildings.  I have provided you with an awesome commercial loan resource at my website to buy these properties with as little as 10% down (even 5% down on certain property types).
3. Buy in Bargainville - the next hot emerging real estate markets across the country.  
4. Get a mentor.  Learn from real estate investing experts who have already done this successfully.  There are a number of them featured in the Real Estate Investing Topics Section of my website.

Technorati tags: commercial mortgage loan, commercial real estate, real estate investing, foreclosures,

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