Home sales bottom out, says Fed economist
Keough Challa
People are unsure about job prospects and income growth. They're worried about declines in house prices.
But housing sales may have bottomed out. That could mean stability in home prices and be a sign of a turnaround, said Ray Owens, a senior economist with the Federal Reserve Bank of Richmond.
Owens was one of eight speakers last night at the 2009 Virginia Economic Outlook Forum at SunTrust Bank in downtown Richmond. The event was presented by the Virginia Asian Chamber of Commerce.
He said that while housing sales dropped sharply, "they have been in a holding pattern for six months. It now appears that housing sales are at a bottom."
Still, the Fed speaker said the economic situation remains quite weak.
For a true turnaround, consumers need to start spending again, he said. That could be hindered by expectations of additional job cuts.
"People who have lost their jobs aren't feeling warm and fuzzy about their employment prospects," Owens said.
Dave Tysinger, a senior economist with the Virginia Employment Commission, compared this recession with the Great Depression, which hit in 1929.
In 1932, the unemployment rate was 23.6 percent. Now, the national rate is 6.1 percent.
Lakshmi Challa, president of the Challa Law Offices in Richmond, said the downturn has far-reaching ramifications for foreign professionals here on work visas. If they lose their jobs they have few options but to return immediately to their countries, she said.
"Many are homeowners with children in the school system. They are taxpayers and consumers who contribute to the economy."
Hugh Keogh, president of the Virginia Chamber of Commerce, said Virginia benefits from being the best place in the nation for business, according to Forbes.com.
"Folks, that is a big deal," he said. It will help bring the state through the recession.
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