On The Market

Are We in a Recession?

Aug 29, 2024

Is the economy really heading into a recession? The discussion highlights interesting indicators, like declining men's underwear sales and rising unemployment. The hosts share insightful strategies for real estate investors to navigate tough times. They stress the emotional realities of recession perceptions, exploring how these feelings shape financial decisions. With humor and expertise, they analyze housing construction's impact on economic stability and emphasize the importance of adapting investment approaches during uncertain times.

36:19

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Quick takeaways

The SOM rule serves as a vital recession indicator, highlighting economic downturns through unemployment rate trends, as seen in recent data.

Consumer sentiment about the economy greatly influences financial behaviors, often leading to perceptions of a recession despite differing expert analyses.

Deep dives

Understanding the SOM Rule

The SOM rule, theorized by economist Claudia SOM, serves as a key indicator for signaling the onset of a recession in the US. It specifically tracks the unemployment rate and flags a recession when a three-month moving average of this rate rises by half a percentage point above its highest point in the past year. The recent data indicated that this threshold was breached in July, prompting discussions and analyses about the current economic climate. Despite the alarm raised by the SOM rule, its historical accuracy is noted, but even its creator suggests that current conditions could differ due to the unique economic influences of the pandemic.

Intro

4min

Exploring Recession Indicators: The Serious and the Humorous

3min

Economic Indicators and Underwear Sales

5min

Recession Realities: Beyond the Label

7min

Navigating Economic Challenges

6min

Navigating Real Estate Investments in a Recession

10min

Are we in a recession? A lot of people certainly think so. After a surprisingly accurate recession indicator went off weeks ago, more and more Americans have begun to believe that we’re already facing an economic downturn. The problem? We rarely know we’re in a recession until we’re out of one. So, how can we be sure we’re in a recession and not just seeing a boomerang effect from the hot post-pandemic economy?

For many Americans, it sure FEELS like a recession. Unemployment has gradually increased, the cost of living has risen significantly over the past few years, and men may be buying fewer pairs of underwear (that’s actually a recession indicator). So, if we are in a recession, what should real estate investors do now to prepare so they don’t get the rug pulled on them before it’s too late? Do you sit tight or start contemplating selling properties?

Dave, Henry, and Kathy all share what they’d do in a recession, the not-so-obvious signs of a recession (or a recession in your specific industry), and whether or not they believe we’ll be in a recession over the next year. If the worst has yet to come, you’ll be able to spot the signs of a coming recession after this episode.

In This Episode We Cover

Whether or not we’re in a recession right now (and signs of one)

The one recession indicator going off that’s pointing to an economic downturn

Signs that we’re already in a recession and what we would do during one

How to deleverage yourself from riskier properties if the economy starts to slow

Whether or not a recession is still in the cards over the next year

Why it may be time to start saving once your husband/brother/nephew stops wearing new underwear

And So Much More!

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