If you think U.S. economy sucks, think twice!

Spring is officially here and it brought new hope to a number of counties around the world, especially those hit hard by the current recession. Last winter was probably the most difficult to bear in Island. This small country between Europe and America has not only a very cold climate, but is also now in a middle of economic crises of catastrophic proportions. 

The failure of the country’s biggest banks in October 2008 eliminated more than two thirds off the value of the local currency last year and pushed inflation to almost 20 percent while sending unemployment to a record high.

 

 The outlook for the rest of this year is grim. Experts predict a 10.5 percent economic contraction (!!!) which in turn, may help contain the runway inflation.  You can learn more about economic troubles of Island on my favorite economic blog – Planet Money.

In this country we face a rising wave of foreclosures after a number of self-imposed foreclosure moratoriums ended last week. Buyers take advantage of extremely low prices not seen on real estate market for a decade or more. You can see a number of foreclosed houses, foreclosed condos and other bank owned properties in Cook County by visiting www.arlingtonheights-realestate.info

Walmartization of Real Estate

In the recent surge of bad economic news and bad corporate earning, Walmart emerges as one of very few companies to stay stable during the recession and even make some healthy profits. Obviously, price driven consumers see the value in $9.99 toasters and $8.99 pairs of jeans. Bargain hunters are also prevailing on the real estate market. The average home sales price in Chicago metro area dropped significantly in February 2009 with huge discounts put on bank owned properties. In Chicago suburbs deals likes a $20,000 condo or a $99,000 house is what really brings buyers to the market. Some properties even receive multiple offers and sell in less than 2 weeks. Is this a start of a long awaited recovery on real estate market? Quite likely so. Especially that the word of cheap deals on condos and incredible prices on both investment and live-in properties, travels fast and more and more people get interested in buying a home again. As for now, real estate agents will have to learn to live on a “minimum commission” level that most of these cheap deals offer.  After all, a typical payment from a $20K sale is almost on a “poverty” line. But what starts small, hopefully will end up large. Some day.