Let’s give a good, swift kick out the door to 2010.
One of the darkest years in memory, it was a time when many labored mightily to convince us economic Armageddon was just around every bend.
To give the perennial pessimists their due, there certainly was much to be discouraged about, from spiraling foreclosures to the worst jobs market since at least the 1970s, if not the Depression.
Nouriel Roubini, the economist dubbed “Dr. Doom” who predicted the financial crisis, could be heard predicting one collapse after another, from European banks to U.S. home prices.
But we also managed to dodge some bullets in 2010, some real, some exaggerated, though it is hard sometimes to distinguish between the two.
The defeat of a campaign to repeal the Bay State’s decades-old affordable housing law gets my vote for the biggest local disaster averted.
So with the end of 2010 mercifully just days away, here is a toast to bullets dodged.
No Double Dipping
Remember all that talk about a double-dip recession? You couldn’t turn on the radio this summer without some commentator fretting over the latest jobless report. It had me convinced for a while that we were in for a repeat of the 1930s. By fall, as the latest GDP numbers came out, it became clear we were on a slow growth – instead of no growth – track. Memories are pretty short, especially in the media. No one seemed to recall the “jobless recovery” of the early 1990s. Economic recoveries are often rocky at the start.
What Commercial Meltdown?
A lot of time and hot air went into predicting the demise of the commercial real estate market. But a funny thing happened on the way to the widely predicted office tower market meltdown: The commercial market managed to find its feet again. Instead of lowering the boom on struggling tower owners, banks began quietly cutting deals. Rents and vacancies stabilized and savvy investors began snapping up trophy towers and suburban office parks at bargain prices. Better yet, our hometown real estate stars, Beacon Capital’s Alan Leventhal and Boston Properties, to name two, are leading the way.
Sales Slow, Prices Plateau
Still, all that paled in comparison to all the bloviating about the coming collapse of the residential real estate market. Not to say the residential market doesn’t still look pretty shaky, what with our nation’s seemingly bottomless supply of foreclosures and distressed property. But despite the big drop in sales after the expiration of the homebuyer tax credit this spring, there has yet to be a massive drop in home prices.
40B Lives On
There was an honest to God bullet that we dodged, and right here in the Bay State, no less. Riding a wave of anger over a few outsized housing developments and sizable donations from a mysterious New Hampshire group espousing “slow growth,” angry suburbanites landed a question on the November ballot that would have scuttled Chapter 40B, the state’s 40-year-old affordable housing law. But the effort faltered as business and housing groups poured thousands of dollars into a successful drive to save the old law. If it had passed, thousands of badly needed homes, condos and apartments would have been wiped off the drawing boards. And the last restraint on the Boston area’s perennially high home prices would have vanished overnight.
Mid-Term Shakeup
Finally, the mid-term elections were looking pretty frightening for a time. Was it possible that someone as nutty as the witchcraft lady in Delaware might get elected to the U.S. Senate? Or for that matter the Republican congressional candidate in Ohio who liked to dress up as an SS officer in “reenactments?” Instead, voters had the good sense to reject the more flamboyant nuts. The few that made it to Washington appear likely to be kept in restraints by incoming House Majority Leader John Boehner, who seems to have the welcome sensibility of an old-time political boss. If divided government produces more deals like the extension of the tax cuts President Barack Obama struck with Congressional Republicans, sign me up. It may be just the medicine the financial markets – and the economy as a whole – need right now.
