Jordan Levine is the Senior Economist for the California Association of Realtors. He is responsible for analyzing housing market data and economic trends in a variety of contexts. In his segment, Jordan shares with us property hotspots in California, the importance of consumer confidence in the property market, and the impact of the government shutdown to the property market.
Big picture implications
800,000 people were missing out on their pay during the shutdown. That was money they weren’t pumping out into the economy, money that wasn’t boosting economic growth and consumption. Which will have a short-term effect on the economy.
What is even more worrying is the impact on consumer confidence in the property business in particular. A house or property is a big purchase, and for most people, the most expensive purchase they will make in their lives. Low consumer confidence means that most people will hold on to their money in case they need it for uncertainties or emergencies in the future. In other words, they will not be inclined to spend money.
So, even though some of those affected by the shutdown will get their back pay, the biggest concern seems to be the uncertainty in the days ahead. As it doesn’t seem like the issues on the political front are ending soon, citizens are getting concerned about how things play out going forward. They’re not going out there and spending their money, instead, they’re holding it—waiting to see what happens.
“We really can’t afford to be rocking boats with their optimism”, Jordan says.
So, if that’s the case, what can agents and realtors do to close deals? If there’s a silver lining to the shutdown, it’s the lower buying rates. Today, we’re down to a 4.5% range of a 30-year fixed rate mortgage.
Agents and realtors can push the benefits of owning a home in the long run, so consumers can save now. They can focus on selling the long-term value of owning a house or property. After all, it’s one of the tried and true ways Americans generate wealth in our society.