May 12, 2008
Are We? Aren’t We? Will We? Won’t We?
12 May 2008
Posted by VAR
The questions keep coming …
“Are we in a recession?” “Aren’t we expected to make a lowball offer?” “Will we get our money back if we sell in two years?” “Won’t we make $100000 on this flip in just two months like they do on TV?”
Okay, so maybe I haven’t gotten that last question – at least not phrased like that – but everything else is verbatim. Plenty of mixed signals floating around about the real estate market, and it’s understandable that people have questions.
Making matters worse, Scott Rogers posted links to posts entitled “The Recession That Never Was Is Now Over“, and “Is Housing Slump At A Bottom?“. I point these out not because I think Scott shouldn’t have posted them, I just think that both posts make strong arguments to at least make you consider that perhaps times they are a changin’. For instance, the post “Is Housing Slump At A Bottom” makes the argument that new housing starts slumped below the one million mark in March. Historically, every time that’s happened in the last 50 years, it’s been at the bottom of a recession. It’s hard to argue with history – as a friend of mine says, “hindsight is 40/40″. Yea, she’s like me, she was never good with numbers.
I do think there are concerns that need to be addressed. Dependence on foreign oil, uncertainty overseas, among other things, compounded by a constant barrage of negativity and fear in the mainstream consciousness, have people scared. These things need to be addressed in order to begin an upswing in confidence, IMO.
One thing I DON’T understand is how we hear about massive layoffs in industries like auto and manufacturing, yet GDP is up. Wouldn’t conventional wisdom say that by laying off in massive quantities, and exporting goods and jobs out of the country, that GDP would go DOWN? In the last three years, Volvo has announced layoffs of 1000, 650 and 1100 personnel in their Dublin, VA factory, for instance – incidentally, it’s the largest truck manufacturing facility in the world. I’ve got to imagine that production in the plant slowed down accordingly, not increased … I didn’t do well in Economics, for sure, but what am I missing here?