We just came back from a week away at a conference
with the best economists, investing experts,
and real estate professionals in the country.
As we expanded our knowledge, we discussed
and planned for the future of our industry
and worked on ways to serve our clients best.
One of the biggest talking points of the conference
was the fears of a recession along with what
kind of recession we may be entering. Over
the four days of the Summit the stock market
dropped at first only to start rising again
before repeating the cycle once more before
the end of the week. The talks of recession
or a collapsing housing market filled all
the newsfeeds and the discussions at the conference.
The current news cycle is latching onto every
possible piece of bad news to forecast a recession,
such as the Wall Street Journal publishing
a piece titles: An Economic Warning Sign:
RV Shipments Are Slipping and many more. What
should we expect in the next year or two?
Here are the facts. We are still in the longest
economic recovery in American history. What
would end this recovery are two consecutive
quarters of GDP slipping, the definition of
a recession. A recession doesn't automatically
mean a housing crisis; the home prices were
growing in 3 out 5 last recessions. The only
significant home price drop happened in the
2008 recession, and that one was triggered
by the housing and mortgage markets in the
first place. Most economists agree that the
next recession will be triggered by trade
wars, stock market crash, or an unforeseen
geopolitical event. The same economists believe
that the home prices will be growing for the
next 5 years. This is supported by the builders
confidence rating, new single family homes
builds are up by 1.9% comparing with the last
year. It is agreed that the next recession
will most likely resemble the recession of
2001, when the stock market dropped by 25%
and the home values increased by 6.6%. Mark
Twain said "Buy land, they aren't making it
anymore". It is expected that during the next
downturn big investors will be pulling money
out of the stock market and buying the safest
asset that exists, real estate. This is Michael
and Elena with the Talis Team. If you are
thinking about buying, selling, or investing
in real estate, dial the number on your screen.
Let's have a conversation. Let's brainstorm
how you can take advantage of the upcoming
market changes.
