Tag Archives: #steveharney #tfsummit #tomferry #housingprices #recession

Time to Panic?

In a word, no.

Last week when the stock market dipped 800 points, the cable news talkng heads and economic “experts” started using the “R” word (recession) and predicted an impending housing crisis.

Fortunately, we were attending the Tom Ferry Success Summit and heard from one of the nation’s leading market analysts,  Steve Harney.  (He is also the Founder and Chief Content Officer of Keeping Current Matters, our industry’s leading information resource that we site frequently in this blog and other postings.)

Steve set the record straight on what’s really happening.

While the majority of economists do believe that there will be a recession within the next two years, we’re not there yet. We are currently experiencing the longest period of economic growth in the history of our country.

A recession is defined as  a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in Gross Domestic Product (GDP) in two successive quarters. It’s not a drop in the Dow Jones Industrial Average, which by the end of last week had recovered about 500 of its 800 point loss.

Those same economists, who believe that there will be a recession in the next two years,  also say that it WILL NOT be triggered by a housing crisis. In fact, they predict that prices will continue to appreciate at about 4%.

According to those who really know, the leading potential triggers of a recession will be either a trade war or some kind of international incident.

And here’s something else to keep in mind. What actions do investors take when they become skittish about the stock market? They take their money out and invest in… real estate.

This chart shows that with the exception of 2008,  housing prices either increased or essentially held their own during the last five recessions.

Steve made one final point that that we should all remember.  We’re heading into an election year and both sides will be exaggerating the situation for their own advantage. These will either be the best of times or the worst.

It will be important to be aware of what’s really going on and not make decisions based on the rhetoric from the last debate or someone’s new Facebook campaign.

As real estate professionals, we know what’s actually happening in the Cape Cod market. As part of the Tom Ferry ecosystem, we have access to people like Steve Harney, who is also an FOM. (Friend of Mari). If you have questions or concerns, we can get you the right answers.

So, please don’t hesitate to reach out. We want to be your source of accurate information.

Enjoy your week…

Mari and Hank