“The best thing about the future is that it comes one day at a time.” - Abraham Lincoln
Our historically high 33.1% third-quarter US GDP growth was in large part driven by exceptionally robust sales activity in the housing market. This is in sharp contrast to prior recessions where housing has often been a weaker sector, or worse, a cause of the recession. So, why has the real estate industry been the heartbeat of our current economy?
Here are some theories: housing supply in many areas have shrunk notably driving up home prices, the 2008/9 recession revealed the USA had a 21st-century financial system with 19th-century safeguards, and most of those flaws were corrected via prudent new legislation and regulation to help prevent future market meltdowns and reckless banking practices, COVID-19 allowed highly distracted and over-worked consumers to focus on their primary homes and also fueled the desire for second homes.
While home sales generate enormous direct transactional economic activity (and tax revenues), as importantly they also generate a spectacular array of other economic activities that fuel businesses such as moving companies, furniture, repairs, renovations, designers, architects, lawyers, inspectors, landscapers, pool-builders, appliances, audio-visual and the list goes on.
Happy November to you all and I hope you enjoy the cool weather we are expecting this weekend as we look ahead to the holiday season.