Alan May does a great job with this post on the whole question of the recession, is it over, are we back sliding? We told him that since normally housing leads us out of recession and housing has held the economy back this time, that maybe with the current turn around in housing it will bring the economy along. Let's all hope so!!
Do you think we're still in a recession? This is a question that was asked today's meeting. The speaker asked the question, and got mixed answers.
It was a room full of Realtors, and he asked "A show of hands, how many of you think we're still in a recession?"... about half of the hands went up. "How many think we're NOT in a recession?"... most of the other half... I guess some folks had no idea, or were nodding off.
Then he asked jokingly... "how many think we WERE out of the recession, but are sliding back in?"
More importantly he asked: "How many of your clients, your buyers, think we're still in a recession?" Almost all of the hands went up.
He went on to define a recession... a simple definition: 2 consecutive quarters, or more, of "negative" Gross Domestic Product. That's pretty straight-forward and easy to understand. Let's check it out.
If you look at the chart. provided by the U.S. Bureau of Economic Analysis, you'll see that we are a full 11 quarters from the last "negative" GDP. That's right, a full 11 quarters... almost three years away from the last defined recession. And yet we still feel like we're in recession.
And more importantly the public perceives that we're still in a recession, and it's impacting their purchasing decisions.
The truth is that home buying "affordability" is at a record high. Interest rates are at the lowest point in history. Not just historic lows... but the lowest mortgage interest rates in history. Period. This is a unique time in history, and yet we and our buyers still feel like we're in recession.
Do any of you have family members who lived through the depression? Did it change their purchasing habits? You bet it did. They became incredibly frugal. They saved things like "twist-ties", and used-aluminum-foil. They were determined that they'd "never go hungry again"... and that spending methodology impacted their children's spending habits as well.
Well, we went through a recession almost as formidable as the great depression, and it has impacted home-buying habits, and it may take quite a while before they see their way out of it. Even though the statistics tell us that we've emerged from the recession a long time ago.
This is information that needs to be disseminated... and the sooner the better.
ALAN MAY, Realtor®
Specializing in Evanston Real Estate and North Shore Real Estate
Coldwell Banker Residential Real Estate, 2929 Central Street, Evanston, IL 60201
847.425.3779 Cell: 847.924.3313 Email: Almay@aol.com
Evanston Real Estate & North Shore Real Estate • Licensed in Illinois
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