Real Estate Insider Blog
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DENVER — “This is going to be the longest economic expansion in the post-World-War-II era,” stated Kevin Thorpe, the global chief economist at Cushman & Wakefield.
He was giving an assessment to a crowd of reporters at the National Association of Real Estate Editors conference, and the general message was one of growth — not risk.
“The U.S. will not be going into recessions anytime soon,” Thorpe said.
“Recessions don’t just happen,” he added. “First we need to see imbalances somewhere in the economy — too much credit, too much exuberance in any particular sector.” Equity markets, oil prices, what the Federal Reserve does with interest rates and “wild cards” could change that, of course, but in general, Thorpe was confident that the economy is strong and will remain so for the immediate future.
“Of course there will be another recession at some point, and the next question becomes ‘What will the next recession look like?'”
In Thorpe’s opinion, it won’t look as gnarly as the last one. “It’s not likely to be nearly as severe as the one we went through in 2008-2009,” he noted. “Big recessions don’t happen very often; every 50 years seems to be the pattern. The next recession is probably more likely to be a traditional recession, with two to three quarters of job...
The initial estimate of fourth quarter US GDP released recently has confirmed that the country is experiencing a slight economic slowdown. This should come as no surprise. We've seen the manufacturing sector continue to suffer from a strong dollar, while the energy sector has been hurt by the low price of oil. What's more surprising is that consumer spending, which has helped power US growth over the past few years, moderated in the fourth quarter.
So what, if anything, is working for the US economy? One area of continued strength is the housing sector. Recall that housing was the epicenter of the global financial crisis nearly a decade ago. It experienced a sluggish rebound for years but is well on the path to recovery at this point. It has been helped along by ultra-low interest rates, which have translated into historically low mortgage rates. This has, in turn, helped counter the more strict credit conditions that have persisted since the crisis and has helped result in a solid increase in home prices, of course with variations by region.
Home Prices Trend Upward
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