The Good and The Bad

by | Feb 7, 2023 | Uncategorized

The Good and The Bad

It’s been said, good times create weak people, weak people create bad times.

2016 to 2020 brought us great times for economics. Household incomes went up, home values up, interest rates down, and the Dow Jones stock market nearly doubled.

  1. Covid brought unusual times and government stimulus. An unprecedented amount of borrowed money hit every corner of the USA and beyond. It was designed to keep the economy going while we found a way through the shutdown. Good intentions don’t always bring good news. The result: 9% inflation, 35% increase in home values, supply shortages, labor shortages, and a dependency economic policy.
  2. Congress appears to be addicted to spending as they continue their path of over stimulus. The Federal Reserve, on the other hand, wants to control inflation and they proceed with raising rates with intentions of slowing the economy. Home mortgage rates went above 7% for a 30-year loan and real estate sales plummeted. Home sales for the Sioux Empire were down 50% in December, year over year.

Neither Congress nor The Federal Reserve are winning, and the real loser is the American family. We now have a slowing economy, wage stagnation, national companies cutting jobs, rising interest rates, and cost of living at 7% annually.

From Good to Bad. What comes next?

Thankfully, the Sioux Empire continues to have strong growth and a highly diversified economic base. We will fare better than the rest of the country. Demand for homes with a minimal level of inventory will keep prices from a hard fall. The economy could suffer much like it did in the late 1970’s and early 1980’s. Owning hard assets was, and is, the smart bet.

Bad times bring strong people. Strong people bring good times.

Today, those who hesitate to buy real estate will fall behind. They will lose an opportunity to own their home and the gift of their best lifestyle. There is no benefit to waiting. Interest rates aren’t going down, 5% for a 15-year loan, and lenders are getting creative with even better rates. The average home value has declined from a record high in June 2022, yet we expect prices going forward to hold steady with inflation.

Fear of the unknown can be a stifling scenario. Those who are best educated take advantage of days like this and are the happiest in the long run.

The Ratchford Group has the experience and knowledge to help you find the answers, develop a plan, and create action to maximize your opportunities.

Tony Ratchford, licensed Broker, Author, Coach, Manager, and Sales Consultant