In the most positive report in almost two years, the labor department has reported the smallest job loss since the recession began.
The smallness of the bad news is extraordinary. Most experts agree we’ve emerged from the recession and expect mild growth next year.
There are still over five million long term unemployed people, and many more that are working reduced hours so the picture is far from great. We’ve heard the term ‘jobless recovery’, which is a euphemism for corporate not personal recovery.
What does this mean for real estate?
The affordability index in my local markets is at historic heights but is already starting to come down (your buying power is still great, but just a wee less great). If you are considering real estate, this is an outstanding time to plunge in. Real estate still represents a fantastic investment. There are down markets and there are boon markets, but over time home ownership is a great way to build wealth.
It will take a very long time for us to forget the new millennia silliness where homes appreciated 15-20% a year, and that’s a very good thing.
People that have a realistic sense of their market, are open to good advice, and buy well will do very well. People that have been dispirited because they can’t flip, earn 20% a year, or feel the market is iffy will miss out.
We can only determine if a trend has reversed after it already has and has been reported in the news. Those that will do well are those that can recognize those trends just a bit sooner.
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