We’ve been reading reports by economist’s outlook for 2020 and the consensus seems to be no fear of recession in 2020. You know what they say about economists. Ask 20 of them anything and you’ll get 20 different answers. While there is a little bit of that, all signs seem to point to a healthy 2020.
In the reports, these economists brought certain facts and ideas that led them to their conclusions. One economist sees healthy consumer activity and job creation in every state. He also points out that the U.S. is short on housing, and historically anytime we’ve needed to build, there’s never been a recession.
While there is no fear of recession in the US as the United States is doing well, the rest of the world isn’t. Practically all of Europe is struggling to pay for health care and migration. It has strained their budgets so much that other countries cannot count on them as much for trade, including the United States. This can impact the GDP of other countries besides just Europe. If any of these countries go bankrupt, it could start a domino effect because essentially, they’re all broke. This would negatively impact trade, which could lead to lower economic activity abroad and here in the U.S.
Another economist points out that we have a few wildcards here at home too. We have the elections coming up next year, and a continued dispute with China over trade. Disruption in either of these two areas could lead to economic slowdown. Of course, gains in either of these two areas could fuel the economy to take off too, so we’ll keep our eyes open on that as well.
No Fear of Recession Locally
Locally in SW Florida we’re insulated. Home prices have been steady the past several years. We haven’t seen large price run ups, so we may not need to see price declines should the unexpected happen to our economy. In fact, SW Florida may have room to grow where others have already seen price appreciation.
Everything boils down to affordability. Each market is determined by wages and housing affordability in the local market. I found a national graph illustrating this point. Housing has become more affordable this year in all 4 regions of the United States. The primary reason is lower interest rates. This graph shows payments as a percentage of income falling as rates have declined. This has helped affordability and has helped fuel room for price increases.
However, rates have been rising in recent weeks. Rates are back up to 3.75%, up from 3.25% a few weeks ago. All this tells us it’s a great time to purchase a home. As rates rise, it will cost more to buy a home, which means buyers will afford less home.
Great Time to Buy
It’s also a great time to sell a home in SW Florida. Inventory is down, and buyers still have great rates below 4%. By all accounts it looks like 2020 will be a good year for the economy, which will make it a good year for real estate. Buyers and sellers should take advantage of these low rates. Some day we’re going to look back at 2019 and wonder why we didn’t make a move.
If you’re thinking of making a move, you probably have questions. We’re here to help. Simply call Brett or Sande Ellis 239-489-4042 Ext 4 and we’ll be glad to speak with you. If you’re not ready for that and just want a trusted value on your home, you can do that too. Go to www.SWFLhomevalues.com It’s Free, and fast. Best of all, that data isn’t sold to a bunch of agents that will hound you. Brett and Sande are the only ones that see it, and we’re not selling that data.
We have other tools available for you. Just reach out to us and we’ll get you on the right track.
See last week’s article “Lower Interest Rates Fuel Increased Pending Sales”
Good luck and Happy House Hunting!