Looking for cracks in the economy…
In the past after our economy has tanked, usually as a surprise to most of us or otherwise we would have gotten into cash sooner rather than watch equity disappear, we look back to what signs might have been there to warn us that we missed. The Great Recession had mortgage companies letting borrowers write in their own income, and even cab drivers were flipping homes as a side business. In the dotcom meltdown one of the warning signs was companies touting market share even in absence of any future signs of cash flow. Looking back we can see how ridiculous that concept was! We have the coronavirus which could turn into a global catastrophe. Hopefully not, but far too soon to tell. My son and I used to watch the TV series The Last Ship, which had as its premise a virus that wiped out 80% of the world’s population. Regarding the real estate market, there was an article titled ‘Manhattan’s Skyscrapers Are Empty’ published in the Atlantic. It mentions 80,000 people sleeping in New York City shelters, while at the same time half of the Manhattan luxury-condo unites that have come onto the market during the past five years remain unsold. Reasons for this include Russian oligarchs, Chinese moguls and Saudi royalty backing off on investments they have made in the past, the declining oil prices hurting the Russian and Middle-Eastern zillionaires, and the US Treasury Department cracking down on money laundering through high-end real estate.
