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December 4th, 2008 8:26 AM by David W. Welch
I could call this the good, the bad and the ugly, but I don't know if anyone would read it. People flock to bad news and words like recession, just like everyone slows down to see the accident on the side of the road. An old joke that circulates whenever we are facing an economic downturn goes like this. "What's the difference between a recession and a depression?" "In a recession you lose your job, in a depression I lose mine." That is the only reference to a depression that you will hear from me.
Since everyone likes to hear the bad news first, here it is. The official recession declaring economists have declared that we are in a recession, and it started in December of 2007. The good news is that our recessions since WWII have run between 6 to 18 months and average about 15 months. That means we should only have three to six months left until we begin our recovery. The ugly is that the last two recessions we have had were very mild by comparison to the average. This one is looking a lot more like the typical recession. That means that we can expect more layoffs, and deeper cuts for another one to two quarters.
As the Real Estate Optimist, I prefer to focus on the good part of this information. I would also like to mention that the bad and ugly present golden opportunities to some. I just closed on three properties that were very good opportunities for my buyers. One purchased a new home at about a $30,000 discount compared to what their neighbors paid. One bought a 1,900 sq ft pool home with hardwood floors in a gated, golf course community for under $170,000. One bought a 3/2.5 townhome for $72,500 where they were selling for over $200,000 just a year ago. Two of these were cash transactions, and the third has a 30 fixed FHA loan under 6%.
David Welch, Orlando Real Estate Blog