I get a lot of questions from customers and clients regarding the state of Jackson's markets. The most common question is regarding whether Jackson has seen the same type of market decline as other areas. Let's be clear about one thing, Jackson (or Jackson Hole) does not exist in a bubble, unaffected by outside influences, as many have said for years. While it is true that Jackson has a unique market when compared to other Rocky Mountain towns, and the rest of the country for that matter, it has experienced declines over the last year which are unprecedented in its history. People also ask me when I think the market will recover and start providing the great investment returns it has in the past. To that I say I wish I had a crystal ball and could tell you. You see unlike past downturns (the early 80's, early 90's, the tech crash in early 2000 and 911) this is a very different situation. It has had such a wide impact, not only in the United States, but abroad as well. The global ramifications of the credit crisis are only now starting to come to the surface and as those intensify so to will the impact on our economy and more specifically real estate markets. Now enough with the doom and gloom because for all the bad that could happen there is plenty of good happening. I, for one, believe the current incoming administration has done a good job of preparing itself to hit the ground running by being intimately involved with what our current policy and decisions should be to begin the process of righting the economy. I can't remember an exiting administration and the president-elect working together, at least apparently, so closely to try and put a solid plan together. The President-Elect has also made some pretty impressive cabinet appointments but it remains to be seen whether they will be the right ones for this dynamic situation. If you want to keep track of progress here are what I believe are the top 5 issues that will need to be addressed in order for us to start to see improvement in our markets:
- Congress needs to use some of the rescue funds to help homeowners stay in their homes (especially with increasing unemployment).
- Banks will need to start lending particularly when it comes to business investment.
- Congress needs to provide incentives (tax cuts/credits) to stimulate business growth and put people back to work.
- The rest of the world will have to follow suit by decreasing interest rates and stimulating their economies with incentives.
- The stock markets will have to stabilize at a minimum but with the above changes may begin to show slight growth.
Any one of these will help but are not enough by themselves. We did see other countries drop rates again this week (England, Sweden) and there is talk our Fed will drop rates in the U.S. again. The credit markets will need to become more liquid and help businesses begin to grow again and as they grow unemployment will begin to subside. This is a consumer driven economy and until the consumer feels confident we can't possibly hope that we'll see any major improvement.
Comments(1)