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    Economic Slowdown: What the Experts Are Saying

    More and more economists are predicting a recession is imminent as the result of the pullback in the economy caused by COVID-19. According to the National Bureau of Economic Research:A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” 

    Bill McBride, the founder of Calculated Riskbelieves we are already in a recession: “With the sudden economic stop, and with many states shutting down by closing down schools, bars and restaurants…my view is the US economy is now in a recession (started in March 2020), and GDP will decline sharply in Q2. The length of the recession will depend on the course of the pandemic.”

    How deep will it go?

    No one knows for sure. It depends on how long it takes to beat this virus. Goldman Sachs anticipates we will see a difficult first half of the year, but the economy will recover in the second half (see below):

    This aligns with the projection from Wells Fargo Investment Institute: “Once the virus infection rate peaks, we expect a recovery to gain momentum into the final quarter of the year and especially into 2021.”

    There are solid reasons to be optimistic, especially when it comes to housing. This is not presenting like the crash of 2008, where the collapse of the economy was tied directly to mortgage-backed securities and skyrocketing default rates. In fact, it’s important to note that of the last five recessions, only 2008 saw home values drop precipitously, while they continued increasing in three other instances, and only decreased by -1.9% in (1991).


    Bottom Line

    This virus is not only impacting the physical health of Americans, but also the financial health of the nation. But it’s not all doom and gloom. Even though real estate has been interrupted or paused in some ways, homes are still selling, people are still buying. And while there are certainly many people who will be affected financially due to the pandemic, many others will not. They may not be going into the office, but they’re still employed and doing their jobs—just from home.

    So, if you want or need to buy or sell right now, reach out, and we’ll work together to get it done in a safe and socially-distanced manner. Video chats with Zoom or FaceTime work great!

    If you’ve been considering buying or selling your home, but this current environment has made you rethink things, that’s perfectly okay too! We’re here to guide you and answer your questions at any time, not just when you’re ready to list or buy.
    We, like you, can’t wait until things get back to normal, and for many of us, simply talking to you about real estate helps things feel normal, so please don’t hesitate to call.

    Stay Healthy. Stay Home.


    Source: Keeping Current Matters, 3/25/2020. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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