It is not the least bit clear that the past year’s global economic meltdown is behind us.
If you discount the constant “public relations” efforts to talk the nation out of its malaise, there’s not a lot of real data to suggest things are anywhere near getting back on track. It gets even worse when not statistics, but anecdotal stories are included in the evaluation of how things really are, and where they’re really headed.
One would think that affluent Northern Virginia would be among the most insulated from the effects of the fact the globe barely averted, apparently that is, what almost everyone agrees was a long stare into the abyss of what could have been the worst and most chaotic dismantling of the global economy in modern history. It is hard to believe that so soon after such a traumatic time, things would merrily begin humming according to the old “normal” rules already.
On the contrary, there are those who are warning that last fall’s crisis was just the first in a series of convulsions that could still shake and rent apart the fabric of the worldwide economy. Germany’s Deutsche Bank issued an evaluation earlier this month that by the beginning of 2011, fully 48 percent of all mortgages in the U.S. will be “upside down,” a situation where the size of the mortgage is greater than the value of the asset, the home, that represents its collateral. In the face of this reality, with unemployment numbers continuing to rise, and the cost of credit, including credit cards, beginning to explode, the intersection of these factors is catastrophic. Then there is commercial real estate, which is being stretched to the snapping point by not only a total stall in economic growth, but by accommodating existing clients and retailers incapable of meeting their rental and lease obligations.
We are beginning to see the only viable economic activity in the current economy, apart from inadequate government stimulus efforts, is what which is feeding off of the misery associated with the downturn. Who would have thought that in the City of Falls Church, for example, a luxury condo at the brand-new Bryon mixed use project that was advertised for $450,000 just three years ago would go in a “short sale” for $250,000, as one did earlier this month? That represents a home sale in the statistics, but it is hardly indicative of economic recovery.
On the ground, commercial building owners are confessing that their tenants, including retailers and restaurateurs, are hurting far more than they’re willing to admit, even in places like Falls Church. Elasticity in the rent and lease terms are the rule, not the exception, but that can last only so long. One successful Falls Church small business that provides services to well-to-do homes reported this last week an assessment that fully 25 percent of the homes of its clients have at least one person who is now unemployed. Such a reality can be masked on the surface, at least for now, but will ultimately need to be reckoned with by us all.
Editorial: Confronting Grim Economic Realities
It is not the least bit clear that the past year’s global economic meltdown is behind us.
If you discount the constant “public relations” efforts to talk the nation out of its malaise, there’s not a lot of real data to suggest things are anywhere near getting back on track. It gets even worse when not statistics, but anecdotal stories are included in the evaluation of how things really are, and where they’re really headed.
One would think that affluent Northern Virginia would be among the most insulated from the effects of the fact the globe barely averted, apparently that is, what almost everyone agrees was a long stare into the abyss of what could have been the worst and most chaotic dismantling of the global economy in modern history. It is hard to believe that so soon after such a traumatic time, things would merrily begin humming according to the old “normal” rules already.
On the contrary, there are those who are warning that last fall’s crisis was just the first in a series of convulsions that could still shake and rent apart the fabric of the worldwide economy. Germany’s Deutsche Bank issued an evaluation earlier this month that by the beginning of 2011, fully 48 percent of all mortgages in the U.S. will be “upside down,” a situation where the size of the mortgage is greater than the value of the asset, the home, that represents its collateral. In the face of this reality, with unemployment numbers continuing to rise, and the cost of credit, including credit cards, beginning to explode, the intersection of these factors is catastrophic. Then there is commercial real estate, which is being stretched to the snapping point by not only a total stall in economic growth, but by accommodating existing clients and retailers incapable of meeting their rental and lease obligations.
We are beginning to see the only viable economic activity in the current economy, apart from inadequate government stimulus efforts, is what which is feeding off of the misery associated with the downturn. Who would have thought that in the City of Falls Church, for example, a luxury condo at the brand-new Bryon mixed use project that was advertised for $450,000 just three years ago would go in a “short sale” for $250,000, as one did earlier this month? That represents a home sale in the statistics, but it is hardly indicative of economic recovery.
On the ground, commercial building owners are confessing that their tenants, including retailers and restaurateurs, are hurting far more than they’re willing to admit, even in places like Falls Church. Elasticity in the rent and lease terms are the rule, not the exception, but that can last only so long. One successful Falls Church small business that provides services to well-to-do homes reported this last week an assessment that fully 25 percent of the homes of its clients have at least one person who is now unemployed. Such a reality can be masked on the surface, at least for now, but will ultimately need to be reckoned with by us all.
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