Real Estate News & Commentary

Do You Know Your Economic ABCs? Or Better, Your UVWs?

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Have you been paying attention to all of the talk about what type of recession we are in? Well, actually if you listen to some people, we are in full blown depression!

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But for those of us who realize that while times are tough… more then likely we are in a recession… not a nice one… but a recession non-the-less.

The talk of late is whether we are starting to climb out of this current recession.  All of the politicians and bureaucrats want us to believe that we are on our way back up and that this recession was a typical V shaped event. 

Are You Buying It?

Hey… why not?  The stock market is up.  Home sales are up.  Even home prices in some areas are on the increase.  But is this real?  Or an illusion driven by Government incentives and wishful thinking?

I believe it is more of the later then the former.  Why?  Because as I’ve written in the past several articles there is just too much still happening.  Unemployment is still heading in the wrong direction.  It is pretty much an accepted fact that much of the increase in home sales is due to the $8K grant program… or in some areas like California over 60% of the sales are to investors.  Banks are lending less… not more.

It just doesn’t feel right!

Enter Dr. Doom!

If you have read about Dr. Doom (AKA Nouriel Roubini) the very same guy that predicted the housing collapse and the current recession much to the chagrin to everyone… you know that he is not convinced that we are out of the woods… and we may be in for long drawn out recovery which would represent that U in the title.

I put the W in there for effect… but lets hope we don’t double-dip this recession!

Now back to Dr. Doom.  I like to follow what he says because as of late, like it or not, he has been right on the money.  And what is he saying now?

As discussed in this article “Dr. Doom” predicts further drop in housing market,” Dr. Doom is saying we aren’t done yet.  There is still more pain regarding foreclosures (we know that already) but his perspective on the commercial crap which is about to hit the fan is interesting.  Read the article.

OK… what are we to do?

For every real estate investor reading this… keep doing what you have been doing. Keep a watchful eye out for signs of that drawn out U recovery and for those investors who are savvy enough… and I know I don't need to be telling you this… commercial real estate is where the next big game is.

WOW… That was profound… wasn’t it?

But, Before I sign off I would like to provide one very BIG caution… if you are only now getting into this game and you have visions of commercial sugar plums dancing around in your head… be careful.  Be very, very careful. 

The commerical world is not a world for wimps or beginners. If you don't believe me… just ask the thousands of investors who are about to default on their commerical loans because they saw easy money and had no idea how to capture or no business pursuing it.

As always your feedback is welcome.

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Peter is an active and successful real estate investor in the Baltimore Maryland region for the past 8 years and is one of the founders of The Club Mastermind a real estate investing coaching progr...
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    Replied almost 11 years ago
    Doom and Gloom is what sells. My income is definitly down from previous years, but I know everything is cyclical and this too shall pass.
    Peter Giardini
    Replied almost 11 years ago
    Liz… you are so right. Doom and gloom does sell. And amoungst all of the turmoil is where the opportunities are… and the commerical arena is the next big thing.
    Dave Sharp
    Replied almost 11 years ago
    Things are definitely cyclical and doom and gloom does sell, but if you’re ignoring the facts on the ground, then you’re simply in denial. There is no doubt that the US Economy is flailing. There is no doubt that the dollar is weakening. There is no doubt that we’re going to see serious inflation in the not too distant future. That doesn’t mean we should be paralyzed by fear, but to pretend that things aren’t worse than they are in a typical cyclical recession is to play ignorant. Get out and make good business decisions and good investments, but don’t think that we’re going to suddenly bounce out of this because of hope and dreams of an inexperienced President.
    Peter Giardini
    Replied almost 11 years ago
    Dave…. Bravo… Bravo… Bravo…
    Replied almost 11 years ago
    Have you ever heard the phrase, “all politics, is local”? All economies are local. Every market has its winners and losers. The bar across the street from the obsolete manufacturing company that just laid off 500 workers may be suffering a little at lunch, but they may be the hot spot after work. The upper class lunch spot might be hopping with no regard for the economy at large. Bottom line is that quality properties are selling at depressed prices. Thanks to the doom and gloom, I just picked up a gem.
    Peter Giardini
    Replied almost 11 years ago
    Joe, Yes… everything is local. On the street corner is where the action is… and that action will continue for some time to come. Congratulations on picking up the gem.