EXPERTS SUGGEST CITIZENS 'KEEP YOUR HOME' IN LIGHT OF ECONOMIC FORECAST
ECONOMISTS SUGGEST HOLDING ON TO REAL ESTATE PROPERTY WITH PENDING FINANCIAL COLLAPSE ON THE HORIZON
‘The economy is booming’ is a phrase that is being lauded and repeated via numerous outlets in mainstream media. While it may appear so, with job opportunities on the rise and unemployment down, this phrase does not reflect sharp down turns in the real estate markets, which indicate that if you own your home outright or have significant (more than 50%) leverage in your property, it is better to keep it – for now.
As Africatown and communities like it (the ones preyed upon by high-income individuals, families and developers looking to take economic and profit-margin advantage of once ‘socially and culturally undesirable and underserved’ neighborhoods) continue to experience the feeling of being wanted and desired, mainly for profit, economists suggest the best move may be to hold your properties rather than sell. The temptations and real benefits of selling in areas like Africatown and Hilltop, may be outweighed by the power of holding properties either owned outright or with vested interest. The Mortgage Bankers Association (MBA) in its weekly reports, shows research as recent as May 2019, which indicates an elongated decline in the purchase of new homes, owned/existing homes and luxury homes, nationally.
However, currently and historically undervalued and underappreciated communities like Africatown, Hilltop, West Oakland and others experience immediate gains in leverage when sold to incoming mid-to-upper income individuals and families – a leverage that is not possible in already established and newer housing developments. Meaning, if a home is purchased for $450,000 and within months of purchase and improvements, the value may increase to $500-600,000, earning short-term economic leverage of $50-150,000 – as has been realized and witnessed in the process of gentrification. Also, as of May 2019, existing/owned home sales have dropped in number for 13 months in a row.
The data reported by the MBA, lead expert economists to suggest that maintaining value already in possession is a decision that supports stability in light of multiple predictors of a coming economic collapse and/or recession – as suggested is already underway, by John Williams at shadowstats.com. In a recent poll by Reuters, economists forecasted that owned/existing home sales (consisting of 90 percent of home purchases) would fall by 3.8%, but actually exceeded the rate at 5.4% from May 2018 to 2019. This revelation begs the question, “why if owned/existing home sales are down in the overall market, are they so sought after in Africatown, Hilltop and other such once-looked-down upon communities?”
The economists, suggestion is that the stability of home ownership, regardless of where people live is one of the only predictable values that can be relied upon in light of a slowing economy. With the marked decline in auto sales, closure and bankruptcy of farms in record numbers, more than 6,000 retail stores scheduled for closure before the end of 2019 and current and looming trade wars and tariffs on the table, economists identify your home as one of the few sources of reliable value – for now.