Ingo Winzer, President
Local Market Monitor
Why
do the monthly economic statistics matter to long-term investments in real
estate? It's partly a matter of timing - you'd prefer not to make an investment
just as the economy is tanking. But aside from spotting the infrequent
recession, investors can dissect current performance to take advantage of the
strategic changes that will affect their long-term decisions.
One
of the ongoing changes in the current economy is the rapid drive for efficiency
fostered by computer technology, which has eliminated many jobs altogether and
allowed others to be done overseas - probably the biggest dislocation since
technology began eliminating farm jobs a hundred years ago, when most people
lived on farms. The TYPES of jobs now being eliminated (or created) - and where
they're located - has an enormous effect on the types of housing people need.
The bifurcation of incomes - more high, more low, not as many in the middle - is
also an opportunity for investors who can identify where and how real estate
demand is restructuring. It's easy enough to SAY these changes are taking
place, but translating them into actual investment decisions can only be done effectively
by finding the fine print in the short-term statistics the government so
generously supplies.
Jobs
in August were up 1.5 percent from last year, this seems to be the new normal
in 2017. Jobs were up 1 percent in manufacturing, 2 percent in healthcare, 2.5
percent at restaurants, 3 percent in business services, and were flat in retail
and in government.
For
those who like very early warning, jobs in finance were up 1.8 percent - lower
than the 2.3 percent rate earlier this year. Growth in finance jobs peaked 18
months before each of the last two recessions.
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