Correction or recession

[Brittany Smith]

Thoughts, are we about to experience a correction or a recession? We are seeing things cool off in the market with the rise of interest rates. Instead of 10buyers you might only have 5. We have a two door brrrr property we are expecting to refi in less than 6 months we have the wiggle room on our numbers and exit strategies. I'm curious about theories and time lines as far as a correction/recession is concerned.

[Chris Webb]

I see both. A correction in Real Estate and a Recession in the economy. The correction is already starting. We are going to see a drastic fall in RE transactions over the next 12-16 months if not longer. We are going to see a recession either now or early next year. The difficulty with recessions is that we have a fairly good jobs market. Once we see the employment numbers decrease it will be the last straw leading into a recession. Keep in mind that the RE market will still have transactions, just not as many as we are used to. The trick is to find motivated sellers and not compete with first time home buyers.