The U.S. Economic Slowdown due to Covid-19: What the Experts Are Saying
More and more economists are predicting a recession is imminent as the result of the pullback in the economy caused by COVID-19. According to the National Bureau of Economic Research:
“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”
Bill McBride, the founder of Calculated Risk, believes we are already in a recession:
“With the sudden economic stop, and with many states shutting down by closing down schools, bars and restaurants…my view is the US economy is now in a recession (started in March 2020), and GDP will decline sharply in Q2. The length of the recession will depend on the course of the pandemic.”
How deep will it go?
No one knows for sure. It depends on how long it takes to beat this virus. Goldman Sachs anticipates we will see a difficult first half of the year, but the economy will recover in the second half (see below): This aligns with the projection from Wells Fargo Investment Institute:
“Once the virus infection rate peaks, we expect a recovery to gain momentum into the final quarter of the year and especially into 2021.”
Again, no one knows for sure how long the pandemic will last. The hope is that it will resolve sometime over the next several months. Most agree that when it does, the economy will regain its strength quickly.
What you can do during this time
Sellers - take this time to work on your home or property. Make repairs, paint, pull weeds and generally make improvements. Even something as simple as cleaning the windows and replacing light bulbs will improve your home's appeal when buyers come back into the market. It is also a good idea to sort through closets, pull out items for donation and pack anything you do not currently need so that you have a jump on moving when the time comes.
Buyers - the virus may have slowed the market temporarily, but there are still plenty of properties available for sale. You can take advantage of this time to check out virtual home tours, research neighborhoods and schools and talk to your real estate agent about your needs. This is also a good time to speak with a mortgage professional and find out what you need to do to qualify for a home loan. Take this opportunity to do your homework and prepare yourself for the time the Covid-19 quarantine lifts.
This virus is not only impacting the physical health of Americans, but also the financial health of the nation. The sooner we beat it, the sooner our lives will return to normal.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Berkshire Hathaway HomeServices NW Real Estate, Heidi Meier & Keeping Current Matters, Inc. do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Berkshire Hathaway Home Services NW Real Estate, Heidi Meier & Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.