A Grain of Salt
Monday, June 28th, 2010Recent media headlines have been touting the creation of hundreds of thousands of jobs and rising gross domestic product (GDP), a so-called true sign of recovery. However, economist Peter Schiff points out that this rise in GDP can be primarily attributed to “increased spending financed by unprecedented borrowing” that is simply delaying the inevitable – that harder times must proceed before our economy can truly recover. Additionally, the bulk of the new jobs created last month were temporary jobs with the US Census. The stimulus packages, the bailouts, the Census jobs, the false pretense of “growth” are all very short-term fixes.
In spite of the media exaggeration of recovery and the potential for hyperinflation due to the artificially low interest rates, we can see a faint silver lining. The multifamily sector could benefit from a higher demand in the rental market as many people search for more affordable rental housing. Although property managers may need to increase efforts to advertise vacancies and offer incentives such as rent concessions, there is no shortage of people in the market for rental housing. Director of Research at Reis Victor Calanog even stated, “The multifamily market appears to be on the cusp of recovery. If so, pricing and transaction activity will rise and the window of opportunity for landing good deals may close soon.”
We strive to feature the best in investment news, and with the media focusing solely on GDP as an indicator of economic growth and the most renowned economists warning against government intervention, we encourage our readers to take the news with a grain of salt.
Sources:
Apartments Stage a Comeback as Renters Return in Surprising Numbers