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    Post: Housing Prices Will Be Fine After COVID-19, Right?

    Posted by carl james juevesano on 5/02/20

    This seems to be a question that no one truly has an answer
    for, but I will do my best to give you several perspectives
    over the coming weeks. Including, how record-high
    unemployment, growing debt, concerns over a recovery, “how
    long before our lives return to normal?” and “how it will
    likely impact housing prices in 2020 and beyond?”.

    sell my house Lancaster

    This week I will focus primarily on Unemployment, Stimulus
    and a comparison of the Great Recession. How many of you
    remember the hardships of the Great Recession? My wife and
    I, both do and it was incredibly hard to find a job because
    of all the economic uncertainty. If you live in the United
    States, then you should know that our economy is based on
    capitalism. Capitalism means that corporations are
    privately owned and the operations are funded by profits.
    How are these profits made, you may ask? Profits are made
    when we the consumers spend money.

    During the Great Recession, a lot of consumers had no money
    to spend, which meant that businesses had no way of paying
    employees. Employees were then laid off or had reduced
    hours. It became a downward spiral as fewer people began to
    spend hours continued to be reduced and businesses began to
    layoff employees. Unemployment surged to the highest
    numbers in years and peaked at 10%. The government had to
    bail out homeowners, banks, and various businesses, just to
    keep the economy afloat. The Economic stimulus package in
    2008 ($152 billion) and the American Recovery and
    Reinvestment Act in 2009 ($831 billion) total to a little
    under $1 trillion.

    Is this starting to feel like deja vu? It might or at least
    it should, but keep in mind there has already been $2
    trillion, injected into the economy for various businesses
    and unemployment. That’s already more than double the Great
    Recession. That number also doesn’t include the 2nd set of
    small business loans approved last week because the first
    wasn’t enough and it is very likely that money will be gone
    just as fast as the first time. To make matters worse
    unemployment is at a record high. According to
    (bureau of labor statistics), there are over 30 million
    people unemployed and that doesn’t count those who can’t
    sign up because the systems aren’t able to process the high
    volume of unemployed. There are roughly 165 million active
    participants in the workforce, which means our unemployment
    would currently be 18%. That means unemployment is at least
    80% higher than it was during the Great Recession.

    So what does this mean for you? Well, there are some key
    differences between the Great Recession and now.
    Overleveraged banks, insurance companies, and toxic real
    estate assets in part to credit default swaps and bad
    lending practices. The last downtown in 2008 was caused in
    part because of real estate, which led to a steep decline
    in housing prices over the following years (2012 was the
    bottom). This downturn may not be due to real estate, but
    that does not mean real estate won’t be impacted.

    The worst impacts of the coronavirus may still be yet to
    come. The United States now has over 1 million cases
    recorded, more than the next 5 countries combined.
    Scientists are also worried about a 2nd or possible 3rd
    wave of the virus, which could coincide with the flu season
    and make things worse. I have talked to several business
    owners who are equally worried about a “slow bleed” when
    the economy opens back up. Most stated that a change in
    consumer habits could lead to less spending and that would
    mean a reduction of staff or closing their business. Fewer
    companies, less work, fewer jobs, and no money means there
    will likely be fewer people looking for homes at the price
    point you want. Keep in mind with real estate the prices
    always go up faster than they come down. As I pointed out
    earlier the peak of the recession was 2008-2009, but the
    bottom of the real estate crash wasn’t until 2012. If you
    are looking to sell my house Bakersfield CA or your
    California home, now may be the time.

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  • Housing Prices Will Be Fine After COVID-19, Right?, 5/02/20, by carl james juevesano.

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