Great Depression?

I’m getting asked on a regular basis where do I see this market going. It feels like we are going into a depression based on the news reports of doom and gloom. Appears many people are reacting to the news when they should be taking a step back to understand where we are and how we got here. It is very important to go back to the facts; nationally and our local market.

Panic doesn’t cause depression; bad policy does. Foolish decisions regarding increased taxes, trade tariffs, and monetary policy are what caused the Great Depression. A great read on the subject is a book called The Forgotten Man – A new history of the Great Depression by Amity Shlaes. You’ll see how the 1929 stock market crash did not cause the Depression.

Another great example of how different a time this is to 1929 is that during the Great Depression countries, especially America, were isolationist by nature and tried to enact a win-lose economic policy. Just last week the Fed, European/British and Canadian Central Banks all lowered rates in unison and even though this cut won’t do much to bring up the credit market, it is a radical contrast to what took place during the Depression.

We are obviously in a recession and will be for a time but, as we are already seeing out West, there’s plenty of demand for discounted homes. Many short sales and foreclosures are in multiple bid situations. There’s money to be made in times like this but it requires us to take the emotions of our fears and apprehension and pour it into the diligence of our daily activities to generate leads.

The best indicators of a turning housing market are inventories and properties sold. In Stark County we continue to follow a very predicable seasonal trend. We typically have two “bumps” in the market; early Spring and late Fall. In fact September sales did jump after declining over the Summer. Inventories remain steady.

There are good values in the market today. Based on 100 years of National Association of Realtors data, home sales will again appreciate. For at least the next 2 years this will remain an ideal market for first-time home buyers, home owners wanting to move up to a larger home and investors.

I don’t know about you, but I am keeping my eye on the situation and putting my head down and getting back to work. OH, by the way… we’re never too busy for your referrals.