Don't start the recession without me!

After the calamities of 2008 most people are understandably nervous about the real estate market. Many are leery of the internal levers that went so awry in the last decade and lead to a crash that many are still reeling from today. I can empathize with this, after all, it was real estate that brought everything else down. No denying that.

But there is another side to this coin: its still all about location. The value of market drivers producing profits in other economic sectors, foreign investors dispersing capital as well as perceived and actual value of properties, have all come together to rebuild the notion that real estate is not dead in the minds of savvy investors. 

With talk everywhere of another recession on the horizon, many negative Ned's and Nancy's think the coming downturn will either be worse than the first or at least prove their fatalistic predictions true.

This is balderdash!

The bubble that some people think they perceive now is not lead by real estate, as was the last recession. Though the volume and gravity of that bellwether in 2008 was great, it was itself inflated at the highest echelons where true, substantive investing was not taking place. Today we do have much more substantive, thoughtful investing happening all over the country without the speculative overbuilding that compounded the last collapse. If a recession takes place it will not be based upon the fluffy speculation of the mahogany-walled, cigar smoke-filled rooms of Wall Street operators. It will be from soured profits and unneeded commodities, a la oil. Your garden-variety recession. 

Moreover, foreign investment is coming in droves. 2015 was a record year. For example, Houston, Texas, alone, last year had the largest intake of foreign capital of any major US city. Why? Because when the actual value of an asset that bears perceived value depresses, investors see an opportunity. In tandem with solid infrastructure demand tends to swing up and inventory tightens. Cap rates begin to rise along with interest rates and strength begets strength. This is what happened in Houston last year and it continues.

Real estate is stable and its always a good time to buy...something. Obviously, not every house or property is a good deal and due diligence is mandatory for any serious investor considering any type of property. But as investments go, overall, real estate is a stable investment. Who is making 2-3% per month in the indexes? No one.

So if there is another recession, I say don't start it without me! All that means is more deals and more opportunities.

-Jason Rowlett