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Recession is NOT a scary word. What You Need to Understand.

I'm not an economist but I am a Real Estate Expert and, because you are a highly valued and important client, customer and friend of mine, it's REALLY really important that you read this post. I've just been with the legendary Steve Harney who is the Oracle on all things real estate and this is what he shared with me;

Recession is NOT a scary word and in fact, of the last 5 recessions, there has been a strong housing market during 3 out of the last 5 recessions.

Remember, the last recession was CAUSED by the Housing Industry and AFFECTED the housing industry.

Would it surprise you to know that, in a recent survey, the top three reasons for the next recession would be caused by Trade War, Stock Market or Geo-Political situation. In fact, Real Estate was the NINTH reason that people thought would cause the real estate industry.

So, here's what you REALLY need to know about any impending recession:

The most important thing to know about all of this current news is that this is all part of normal cycles that occur on average every 7-11 years. We're in year 10 since the last recession and so it's to be expected that the market will turn at some point in the not too distant future. In fact, given that Real Estate has always been a pretty good bellwether for the broader economy, us Real Estate experts have been talking about this transitional 'shift' for a while now.

With the global economy under duress (Brexit, Trade Tariffs etc) and the cost of living rising above the rate of inflation for so many for so long, the banks have been stimulating growth by reducing interest rates and ensuring that we all continue to contribute to the broader economy by continuing to buy expensive things both here and abroad and that we continue to make that single biggest investment most of us make on average every 10 years or so - buying a house.

And so, yes, the Real Estate industry is in a great position to tell it how it is and show trends and patterns. So, as we have all seen over the last few months, Real estate prices at the higher end are coming down, inventory is increasing and the time it takes to sell a home is taking longer. This isn't a bad thing. Far from it. This is just the normal ebb and flow of the cycle and we are simply shifting into more of a buyers market than a sellers market.

But the pace at which this happens can certainly be exacerbated by panic in the stock market or jitters from financial institutions. And so if you're thinking of buying, selling or investing in real estate, it's important to understand that there is no good market or bad market. It is just the market. For some, a recession is an opportunity and for some a shift into a buyers market is a welcome relief from the frothy sellers market.

Remember - the drama that the news cycle pushes out is just that. Drama. It's what sells advertising. It wouldn't be very exciting news if all the anchors said "Don't worry. This is entirely normal and predictable. So don't panic. Just keep calm and carry on" That wouldn't get ratings now, would it?

But for us at the coal face, out there helping people buy, sell and invest in real estate - it's REALLY important to recognize that - as with any of the biggest investments you make just a few times in your life, you've got to think about the long term. Cycles will happen, changes in the economy will come and go but you've got to keep going, you still need a roof over your head and buying, selling and investing in Real Estate is still and will always be a fundamental part of any long term wealth building and investment strategy. So sure - enjoy the drama but don't let it knock you off your own path.


If you're looking to build wealth through real estate giving you the freedom to do what you love, call me. I've got some great ideas to share with you and I'm here for you!

Luke Jones

Real Estate Expert

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