This Economy’s Recovery is a Surprise to Even the Most Experienced Economists
Remember back in March when it was all gloom and doom relative to the economy? The predictions were downright apocalyptic not just for California but most of America! It was even going to be another Great Depression. Fast forward to September…while the country is still a little unstable, it is evident that we will not face the total devastation projected by some soothsayers. The Wall Street Journal just reported:
“The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected…Business and academic economists polled by WSJ expect gross domestic product to increase at an annualized rate of 23.9% in the 3rd quarter. That is up sharply from an expectation of an 18.3% growth rate in the previous survey.”
The question remains, what shape will this recovery take? Historically, recoveries have taken the form of one of four letters: V, U, W, or L
- V-shaped recoveries are all about the speed of the recovery.
- U-shaped recoveries are characterized by a sharp fall into a recession but remaining depressed for a longer period than a V, possibly even for several years.
- W-shaped recoveries begin like a V-shaped recovery, but plunge into a second, often smaller depression before fully recovering to pre-recession levels.
- L-shaped recoveries are the worst-case scenarios. Although the economy begins to grow, it remains at a much lower base than before the recession and can last several years. The 2008 recession was an example of this type of recovery.
The Wall Street Journal asked the same economists as in the previous survey which letter this recovery will most resemble. The results give us reason to hope:
- 68% believe it will be a V
- 11.1% believe it will be a W
- 3.7% believe it will be a U
- 1.9% believe it will be an L
From this report we can see that while the economy has a long way to go, so far, we are doing much better than most experts predicted. And one of the reasons we seem to be coming out of this recession so quickly here in California is the real estate market. It is hot hot hot and continues to surprise everyone.
So, if you ever thought about adding real estate to your retirement portfolio, this may be the time to do it. Give us a call at Sun Pacific Mortgage 707-523-2099 if you don’t quite qualify for a conventional loan or need a fast close. We have helped thousands of buyers just like you over the past three decades.
The content of this blog contains general advice only and does not consider individual financial circumstances, desired loan amounts or existing real estate or lending transactions. This information is intended for licensed Real Estate Agents and licensed Lenders/Mortgage Brokers and is posted on our company website and specific blog sites with the express purpose of reaching such licensed individuals.