Yep! It was released a few hours ago: the unemployment rate is only 9.4% and it was expected to be 9.6%. The free falling stopped so why aren’t you get a job yet? Or why don’t you have more money than a couple of months ago? Well, it takes some time… companies will not start hiring people like crazy overnight. They will be cautious since most of us learnt a lesson out of this mess. I think all of us will be more carefully from now on. This will determine an slow grow in the near future.
In past recessions the main economy drivers were housing, durables and exports. Internal demand accounted as much as 70% of the economy. Not this time, at least not in the near future. There have been structural changes with this crisis. People and companies will spend and hire much less than in the past. America looks like will become more frugal which I do not think is all a bad thing. Let’s keep ourselves focus and do not be over optimistic. All that I am saying is that it looks like we are not going anymore down. The way up will take a few years. That is my opinion.
Where are the opportunities in Real Estate in this new environment?
1. The “amazing deals” are almost gone so hurry up. Banks became smarter so they are not “writing off” bad loans and getting ride of the house for nothing anymore, now they learnt to “work things out”.
2. Rates are still low. Yes they are. Jimmy Carter was the Obama of the beginning of the 80’s. After his management rates went around 18% for a mortgage so please do not complaint when your loan officer offers you 6% 30 years fixed.
3. Now we have the Commercial Real Estate crisis which is a great opportunity for buyers like you. Because demand is low many retail businesses lost their properties. You can step in buying for cents out of a dollar… same like in residential. Buy mixed use properties, strip malls or whatever good piece you have in mind. Call me to analzyze it together.
Do not unbuckle! This road to recovery will be bumpy but we will be fine long term. Have a great weekend!