While in 2000 we by definition experienced a recession, not many people felt it. The housing boom was just beginning and many were moving up, or at least felt like it. It seemed everyone learned about it after it was long gone.
Now all the experts seem to be tiptoeing around the official declaration, so as not to exacerbate the current economic recessionary trend. In my opinion, if the masses think we are experiencing a recession, it is a self-fulfilling prophecy of sorts. Certainly as agents we feel like we are in one. But comparing today's market directly with the one from 2-3 years ago is not really fair, as that market was very unusual.
We are now hearing the word "stagflation" again, which is defined as slow economic growth and rising unemployment, possibly including recession.
The local and regional economy where I reside appears to be doing better economically than the national average. But even if the numbers can show that the country is not technically experiencing a recession, does it really matter to you and I?
-Mark
Hi Mark,
I get tired of this cliche but I'm going to use it hear anyway. Perception is reality. Unfortunately most Americans now perceive that we are in a recession and as yo mentioned, it then becomes a self-fulfilling prophecy. Yes, 2004-05 were unusual markets in real estate. However, even comparing the current numbers in our market (Phoenix) to 2001 (a recessionary year and the year of 9/11) we are off. As I stated on my blog yesterday, the Federal Government is going to have to step in. This housing slump is affecting EVERYONE. If it hasn't hit your market yet, it will if left unabated.
By all definitions real estate as a segment of the economy has been in a recession for sometime. This recession is going to be pretty severe. US Senator Johnny Iassacson from GA who is a Realtor, and owned one of the most successful real estate firms in GA and who has seen other recessions and down turns described this one as a major significant event!
It has definitely hit my market and most, if not all others. What worrys me more and more is the value of the dollar, though this will make foreigners more likely to invest here.
We all new that our crazy markets could not continue to go through the roof for ever. Throw in some questionable lending practices and then you have a crisis.
-Mark
A good watch on CNN tonight on the "mortgage meltdown". I am not typically a CNN viewer but this was fairly straight talk that was informative. They did beat up Greenspan a bit. I still think that in the nation as a whole, things will get worse before they get better.
-Mark
I guess it's official now. Ironic that the "official" declaration comes the first business day after "Black" Friday. -Mark
Time to turn off the news and look at positive things in life.
Many consumers in our area have come to the realization that we are in a recession. They still believe the market is still increasing and refuse to drop their prices. I believe we need to focus on finding that client that really wants to buy or sell real estate......forget the news.
I really do not pay attention to it anymore. It is just a lable. To some it is a depression, and to others it is business as usual. Some areas begin earlier and come out sooner. Some areas will experience very little dispruption.
Julie and Kay - I agree, though we can't ignore the news. But as economic news reports tend to focus on national averages and statistics, we all work in individual markets that can each have both hot spots and dead zones in any real estate climate. The positive - gas prices and mortgage rate trends right now.
Jim - Those for whom it is business as usual can get some good deals right now. They just cannot expect a blanket percentage amount that all homes have "dropped" in value.
Thanks for your comments - Mark
Hi Mark,
It is indeed a recession. :)
And I have a feeling this is going to be like nothing we have experienced before.
The reason the recession was mild in 2001 was because the housing market was strong - not so this time around. Everybody is going to be feeling the pain.