As we enter 2020, the prediction game is on and you will hear and read lots of predictions, many that contradict one another. Here are our thoughts on how to navigate through all of the noise.
First of all, no one’s crystal ball is better than yours. That means, if you research the markets with an open mind your opinions are a valid as anyone’s. And, of course, no one really knows for certain what will happen.
Globally, the world economy is still considered weak. China, our biggest competitor for status as the largest economy in the world, recently had some bank failures that the Chinese government allowed to happen. We also continue to hear of weak economies throughout Europe and Asia. These soft economies do mean that interest rates should remain very affordable for home buyers in the US for the foreseeable future.
Nationally, we have a group of economists saying there will definitely be a national recession in the 4th quarter of this year while the National Association of Realtors says the possibility of a recession is less than 30 %. And with an election coming up in 2020, you can bet the incumbent’s will do everything in their power to prevent a recession. Also, nationally the Case-Shiller indices show a slow but steady growth in prices in many markets through the country including ours.
Locally we in the Northwest have enjoyed a very dynamic real estate market for the last seven years. So while world markets and even the US market as a whole might falter, we do not see a recession in Western Washington in 2020. Of course if the world and national economies enter a recession, the question remains, how long can our local economy hold up? Of course, no one knows that answer, but we believe we will not have to answer that question this year. We and I’m sure you, hope we are right.