Pandemic, Election, and the Economy Pandemic, Election, and the Economy oh my!! In April, I wrote about the pandemic and the national and local real estate markets. The report at that time focused on 2019 and Q1, 2020.
Currently-
I shared comments and opinions (personal and referenced) regarding the state of the national, state, and local economies and how each may be affected as we move through the year. Let us look at what has happened since that report. The following information will cover the middle six months of this year i.e. Q2 and Q3, 2020. NationallyBetween March 19th and April 6th, Forty-One States had issued a Stay Safe, Stay Home, Stay Healthy policy. On June 13, 2020 POTUS Trump issued a National State of Emergency which gave him the tools necessary to support the needs of various states as well as local and national economy. Fairly immediately, we did something that was unprecedented which was to start pumping $2 Trillion into the US economy. I say unprecedented due to the speed the POTUS moved on the situation at hand. While we have done this prior it was always too late (thinking of the great depression and recession) helping create disaster prior to recovery. The major concerns outlined at that time were: 1. National and Worldwide Debt Crisis (massive deft defaults) 2. High Inflation – Loss of purchasing power 3. Higher interest rates 4. Extreme and Persistent Unemployment
1. National and Worldwide Debt Crisis (massive deft defaults) a. It is too soon to predict if a Debt Crisis will occur and to what the impact will be. 2. High Inflation – Loss of purchasing power a. The flow of goods and services has certainly been disrupted however inflation remains at only 1.3% nationally as of August 2020. Or is it? In a Wall Street Journal Article dated September 26th James MacIntosh wrote “The laws of supply and demand explain the divide in inflation between the stuff we want and the stuff we don’t. The outlook for inflation is divided too, between the obvious inflationary pressures and the obvious deflationary pressures, due to overall supply and demand.” He continues in his article that stuff we want is up. For example sitting at home on Zoom in our pajamas the need a new suit or dress (down 17%), makeup (down 3%), hotel room (down 13%) or air ticket (down 23%) are at a recessionary level. Yet our pajamas (men’s nightwear is up 4%), cycling (bikes up 6%), reading for pleasure (books up 4%, newspapers up 5%) and making things (sewing machines and fabric up 9%, cameras up 4%). Medical care is in demand (up 5%), while higher education is much less attractive (tuition fees up 1.3%, the lowest since data started in the late 1970s).
John L. Scott Real Estate Columbia Basin Region These offices are owned and operated independently
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