Recession for 2008? Nope, Say the Experts

You heard it here: Despite the steady stream of depressing news about the housing industry, an economic recession is not likely for next year. Rather, the economy will be buoyed by the tremendous buying power of the baby boomers, most of whom are in their peak-income earning years; continued retail spending by both baby boomers and echo boomers; job growth that will continue, albeit more slowly; and the fact that property fundamentals are strong throughout the commercial real estate sector. That’s the word from a panel of experts at ULI’s annual fall meeting this week in Las Vegas.

Trends in capital markets and investments were discussed at a standing-room only session today featuring perspectives from the developers and investors. Panelists agreed that the fallout from the housing credit crunch is spilling over into the commercial real estate sector, making it difficult those already highly leveraged to secure financing for projects. An environment in which "cash is king" will prevail over the year ahead, leaving those who are well-capitalized in an excellent position to make acquisitions. "With enough equity, you can get loans anywhere," said one panelist.

Added another: "The way to make money is when no one else does. When everyone has money, the (profit) margins are much thinner. Now, (those who have money) have some real opportunities for growth."

Stay tuned for more opinions on what's next for real estate capital markets and investment opportunities.

Comments

[San Diego Real Estate Blog]

Actually, Former Federal Reserve chairman Alan Greenspan said in early April that the U.S. economy is in recession and that it would be appropriate to tap public funds to resolve the mortgage-related crisis that has helped pull the economy under.

In fact, I wrote an article about it on my blog, you should check it out: http://www.brokerforyou.com/brokerforyou/?p=318