Gas prices and economy

[John Carbone]

Gas prices are really starting to accelerate with the national average at $3.40, which is historically very high. Oil is only just over $80 a barrel, and I believe $150 a barrel was the ATH several years ago. GDP only came in at 2 percent and we still have revisions that are expected to be below 1 percent when it is finalized, and this despite all the liquidity injected into the market.

my question is, high gas prices impact short term rentals especially in the panhandle and Smokey mountains. These markets are on fire and at all time highs but headwinds look extremely bleak and reminiscent of the cold winter from 2008. How are you all feeling about this, is this just FUD?

The data seems to show that we are at the beginning of a potential long period of stagflation reminiscent of the 1970s. 

[JD Martin]

Originally posted by @John Carbone:

Interest rates are also increasing. Historically every 100 basis points represents a 10 percent move in real estate. What’s the continued bull case? I’m struggling to find them, all I see are headwind after headwind. 

And yes, $1 a gallon more is just x more, but at what point does that extra dollar become significant. $2 to $3, $3 to $4, $4-$5 etc, eventually it matters. I think $4 gas pricked the economy last time. 

 $4 gas in 2007 is a lot different than $4 gas in 2021. My prediction is even $4 gas has virtually no effect on anything regarding tourism. RVers may stay at locations longer; beyond that, even a $2/gallon rise in gas prices only adds $100 to the travel costs of someone driving 1000+ miles round trip, beyond which a lot of people will fly instead of drive. 

If you want to worry, of course, then by all means you should enjoy yourself; there's certainly no shortage of news items you could pick on which to feel distressed :)