Charleston Market: Looking Ahead As We Open From COVID-19
/“One of the toughest lessons from history, is humans rarely learn from it”
What a haunting and telling quote from one of my favorite documentaries, 180 Degrees South. Something we can hopefully remember during both good times and bad, but perhaps its our evolutionary laziness in picking the path of least resistance or perhaps greed, but often asset markets see similar cycles despite the ignitor.
During crisis we all want to know what the future holds. Some for security, some for peace of mind and others for opportunity. Regardless of why you’re seeking answers I often find it useful to gather as much information as possible from trusted news sources, opinions from some of you and telling data sets before drawing any conclusions. Perhaps it’s the little bit of retention I have left from Econ classes long since forgotten over a decade ago, but this data gathering has always served well.
There’s no better way to look at what the future holds like looking at our past. One mistake I do see people often is treating each recession or downturn the same. Expecting a recession that was caused by massive holes in the home lending system, leading to artificially inflated home values and complex packaging of those risky loans is foolhardy at best. The world is a much different place than it was over a decade ago and this is a much different recession we are headed toward.
Disclaimer: When I say recession I do not mean you need to hit the panic button. A recession is usually defined as a contracting of GDP over a successive 2 quarters. You can not always grow. In my opinion the economy was looking for a reason to pull back well before anyone had ever heard of Coronavirus (well at least most of us blissfully ignorant).
Cool, now that we have that out of the way. Take a look (probably already have) at this video of our beloved Charleston Metro area.
While I have my own opinions and believe in a very odd way this crisis only stands to benefit our city by the sea on the macro, Charleston is not immune to the global system being put on pause. I am not here saying the market and home values will do what is reflected above (as we’ve experienced real growth in population, opportunity and demand not fueled by the funny money injections of the housing bubble), but those of you keenly able to recognize patterns may likely draw the same conclusions as I.
Ultimately in the past decades worth of bull market run, there have been folks who have over extended. While they may be foreclosed on, have their businesses close or have to adjust to a new job. Good companies will restructure, people will become more efficient, we’ll likely realize all the amazing things we take for granted and not sweat as much as the small stuff.
So regardless of where you’re at right now, if we can help in making decisions moving forward, you know where to find us.
