Troubles on the horizon?

[Rich Weese]

I really didn't want to list anything negative on a thread today but they say three strikes and you're out. Here are my three strikes for the day.

one – Bank of America says they are going to close at least 750 branches during 2012 in addition to the 30,000 people that they have already stated are going to be laid off.

two-S&P is rattling the sabers again with regards to lowering the credit rating of multiple countries in Europe. Some of these may be reduced two levels beginning with France and might also include Greece, Italy, and Portugal and Spain. I don't see how the troubles in Europe will not eventually affect our Banks and economy.

Three – the story on foreclosures is not getting any better. Realty Trac has predicted there would be 25% more foreclosures this year than last year. 1 million homes are projected to go back to the banks during 2012. There are currently 12 million homes underwater in the United States. Of this 12 million, 3.4 million are currently in default and scheduled for foreclosure. There are 2 million vacant homes for sale at the present time. Realty Trac is projecting an additional 1 million added to this number in 2012 and an additional 1 million more in 2013.

I realize this may offer some tremendous buying opportunities but with some of the other scuttlebutt going on in items the government may try it does make it a little bit scary. Will the government really get into the rental business and take a bunch of these vacant homes and try to run a rental business out of it? This would affect my business of rentals as I would be competing with the government. Would they play fair? Would they run this business any better than any other business that they are currently running?

Just looking for any additional input from BP members as to why these should be of concern to us. Rich

[Danny Day]

I'm not sure that the goverment has the budget / infastructure to be a landlord. I don't even know where they would begin to do that.

They need to have some common sense and start pulling off these 20-30 windows for o/o to purchase and let cash buyers pick them up.

We see a down market for 2012, millionares are made by buying assets all around the US, they pay more taxes, and once the REO's burn off prices will stablize.

All this depends on someone in D.C having some common sense, so I doubt that will happen any time soon. With out this getting too political I'll end on a nice note and say 2012 will be a good year for real estate (keeping my hopes up).

Capitalize on the down market, which I'm sure you're doing Rich.

Good post

[Rich Weese]

Add Austria that was just lowered.

[Stacy Steven Smith]

Here's the recap of all of S&P's European downgrades today:

France and Austria down one notch, stripping both of their coveted triple-A ratings.

Downgraded by TWO notches are Italy, Spain, Portugal and Cyprus.

Only Germany and Slovakia were given stable outlooks while all the others received negative outlooks.

The S&P said it was taking the actions "because Europe's leaders had failed at recent meetings to take decisive steps to solve the region's debt crisis."

If Europe continues to have troubles, they may very easily affect our fragile economy, and let us not forget that our own debt is a 100% of our GDP. Having wealth in real assets like Real Estate, might very well be a God send for many in this kind of economic environment. Here's hoping for common sense in our leadership. We really need it right now.