Recession Obsession

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Did You Know?

  • Warren Buffet made about 95% of his wealth since the age of.....60! The average person becomes a millionaire closer to the age of 60, and women hit this milestone sooner than men, under 59 years of age. 
  • Re-financing volume are up over 160% from a year ago. (CNBC)
  • 10,000 Americans turn 65 years old EVERY DAY...and this will continue to 2030. (Crain's)


Recession Obsession

Recession talk has become somewhat obsessive over the past few weeks and many have reached out to me for my opinion on this subject.  Whilest I am not an expert, I thought I would share some facts about recessions since - and including - the Great Depression (a once-in-a century occurrence):
  • There have been 14 recessions total since and including the Great Depression of 1929, or one every 6.4 years. We have not had a recession in 10 years.
  • 64% of recessions since 1929 lasted under 1 year.
  • Unemployment rose above 10% in only three recessions. In the past 50 years, unemployment averaged 8.25% during recession.
  • In the past 50 years the average GDP decline was just 2.2%. Currently the USA GDP is growing over 2% annually.
  • ATTOM Data Solutions looked at home prices during the five recessions since 1980 and found that only twice—in 1990 and 2008—did home prices come down during the recession, and in 1990 it was by less than a percent. During the other three, prices actually went up.
Buying a home during a recession
Many buyers think waiting till a recession hits will allow them to buy 'bargains'.  This may be true for some all-cash buyers, although history has taught us that when a recession hits:
  • The best properties are often withdrawn from the market IF there are signs of price declines. 
  • Interest rates may be lowered, but obtaining financing becomes tougher as banks usually tighten lending standards.
  • If you lose your job, its almost impossible to obtain a mortgage.
  • Cash buyers are always waiting for opportune moments to buy. Competing with these buyers is tough enough during good times. Its worse during tough times.
  • Rents tend to rise during recessions as fewer people qualify for a mortgage to be able to buy. Homeowners who have to foreclose also add new demand for rental housing.
Much of the housing demand is driven by employment. A spike in unemployment could negatively impact demand, particularly if an intensifying trade war leads to export tariffs, which could put jobs at risk. But with unemployment at 2.4% in San Francisco, it would take a pretty dramatic rise to cause home prices to drop.

In addition, tariffs on imports and tight immigration policy could push constructions costs even higher - all which could impact supply and ensure that housing prices will not slow down , if any at all.

Most importantly, we need to remind ourselves that even in the WORST recessions life goes on: people get married, divorced, die, give birth, etc and the vast majority continue working and earning.....and living. 


San Francisco Happenings

Mid-Autumn Festival at Off the Grid: Fort Mason Center.
Friday Sept 13 | 5:00- 10:00 PM

De Young Museum: Free Saturdays for SF Residents
Saturdays | 9:30 AM - 5:15 PM

Hayes Valley Urban Air Market
Sunday Sept 15 | 11:00 AM - 6:00 PM

 

Free Rooftop Concerts  | Salesforce Park
Wednesdays  | 5:00 PM - 6:00 PM
Do you know anyone looking to move to what's next? Let's chat. 

Cheers, 
Maggie 

SAN FRANCISCO HOME PRICE MAP - COMPASS

Updated June 1, 2019: This map reflects median home sales prices in San Francisco neighborhoods for the 12-month period through May 2019. Median sales prices are generalities that often fluctuate and can be affected by other factors besides changes in fair market value. They typically disguise a huge range of prices in the underlying individual sales, and how these median sales prices relate to any particular home is impossible to say without a specific comparative market analysis. All prices should be considered approximate. Data per sales reported to MLS, deemed reliable, but may contain errors and subject to revision.

Run cursor over map to pull up icons and prices.

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Jobs Report: California sees largest monthly gain in two years

According to the lates report from the state Employments Development Department, California added 46,000 jobs in April – the largest monthly gain since March 2017.

  • While monthly job additions have varied a lot since the beginning of the year, California led all states in the monthly increase. The state has added 271,600 jobs over the last year, which is a 1.6 percent year-over-year increase – slightly behind the 1.8 percent overall national growth rate.

  • The state’s unemployment rate remained steady at 4.3 percent in April. Labor force declined, however, by 52,200 in April, after some solid increases in first three months of the year. Compared to a year ago, the labor force has increased by 203,900 people.

  • With 46,000 jobs added over the month, 9 out of 11 industries added jobs in January, with largest gains in educational and health services, up 17,300 jobs, followed by leisure and hospitality, up 12,100 jobs. Information and minting and logging posted monthly losses.

  • In annual comparison, 10 out of 11 industries added jobs with health services showing the largest gains, up 78,800 jobs, followed by professional and business services, up 66,900 jobs. Only financial activity posted an annual loss of 2,700.

  • Regionally, Los Angeles finally showed a rebound after a rocky start to 2019. Los Angeles County added 19,300 jobs over the month and 56,100 over the year. The region’s labor force, however, declined by 20,000 which is not encouraging for hiring trends going forward. Nevertheless, monthly gains were largely focused in leisure and hospitality, with a larger than usual seasonal addition. Construction also saw above-average April gains bringing the sector’s employment to the highest level in more than a decade. On the annual basis, the health and wellbeing of an aging population continues to influence large gains. Job additions in healthcare and social assistance, up 18,800, accounted for ninety-two percent of the overall sector job growth to reach a new all-time high. On the other hand, losses were focused in financial services, particularly, finance and insurance, though apparel manufacturing was down as well.

  • In the Bay Area, gains were broad based across the regions and most regions saw unemployment rate decline again falling below the year-ago bottom. In San Francisco-San Mateo region, up 5,000 jobs, monthly gains were led by healthcare job additions, followed by leisure and hospitality, and solid gains in information.

  • In the Santa Clara-San Benito region, up 6,400 jobs, gains were also led by leisure and hospitality, but also specialty trade contractors, and information. Computer and electronic product manufacturing posted 1,100 losses.

  • In Alameda and Contra Costa, up 6,800 jobs, similar trends followed with healthcare and social assistance leading the gains followed by leisure and hospitality.