While signs of economic improvement are visible we are also faced with harsh reality of what the real estate market and the economic world has been like over the past six years. In previous articles regarding the economic situation and the real estate market we covered the complaints that Qazzoo hears from our consumer users and the underlying concerns that create the complaints.
The price of homes has recovered in many areas in the country but still others are still suffering from the fact that home prices have not caught up to the peak of the market in 2007 when they bought their homes or took out a second mortgage.
As the average American family has lost a $24,000 in annual income, their homes have also declined in value which leaves many Americans under water on their homes which until recently they thought were their greatest asset. But the often missed piece of the puzzle that leaves people scratching their heads and sending their complaints to Qazzoo is while the economy continues to apply downward pressure on their incomes, how is it that items that should not have been impacted by the housing market are more expensive than they were during the period before 2008.
The easy answer to this conundrum is that the price of gasoline at the pump has doubled in the past six years. The price increase from $1.87 a gallon in 2008 compared to the average cost of gasoline in 2013 in California being $3.65 a gallon (approximately 100%) has rippling effects across every facet of the economy.
An orange cost more to ship to the grocer and that cost is passed on to the consumer. A FedEx package is delivered overnight via a series of flights and ground transport. Each vehicle has increased costs to operate because of the cost of gasoline.
The average American whose income has been reduced by $24,000 over the past six years and the cost to get to work has increased simultaneously. This is the unseen part of the economy that creates the concern that it will not end. That the pain and economic squeeze is multifaceted, that there are no easy answers. That this is the new norm and it is not what they had bought into.