September 2, 2008 - Oil's surge is over. Having reached almost $150 a barrel, it now trades near $100, as of this writing. It may be lower when you read this. That's good news on many fronts. But lower oil prices aren't enough to get this economy back on track. For that, real estate, and in particular home sales, and employment need to rebound in a meaningful way. Here's why.

But these are not enough savings for consumers to feel it's ok to buy a new car or a new dishwasher or other large appliance, much less a house. These major purchases only happen if unemployment isn't a daily topic of discussion at the dinner table or when house prices are rising, generating real wealth. If consumers feel their jobs are safe (if they have one) and their homes appreciating, they have confidence in the future and are willing to buy something on credit or save enough to buy it outright, knowing their savings will be replaced over time.

The two biggest factors that need addressing for an economic rebound are jobs and the housing markets. They're the main drivers of the economy. This isn't to suggest that everyone can go back to the over-leveraged days of borrowing every penny out of a house to go on buying binges. Rather it's the basic ability to sell a home, take the proceeds and buy another or use some of the funds to buy other things. That requires lenders to loosen credit a little, not imprudently, so that creditworthy (and that's the key word) borrowers can have access to credit to make purchases they are now deferring, including buying a home.

Real estate is responsible for many jobs as well as wealth building. It's not just the brokers, lenders, carpenters, roofers, brick layers, tile setters, and dry wall experts. There are also the appliance manufacturers, the lumber mills, and right on down the line as you think of all the materials and products that go into a home. Taken together, they're a large part of the gross national product....continued