"How's the Market?" feat. Steve Harney @ Summit, August, 2019 | TF + KCM

TL;DR

Steve Harney discusses the impact of recession fears on real estate.

Transcript

chief what's going on in the stock market is it going to impact the real estate industry give us a little oracle state of the union okay I'm not worried about the stock market as much as I'm worried about the words that are coming out of what happened in the stock market on way that again I'm not worried about the stock market has recovered over 40... Read More

Key Insights

• Despite recent stock market fluctuations, the real concern is the pervasive use of the term 'recession' in media, which can affect client perceptions and decisions.
• The current economic recovery is the longest in American history, and an eventual slowdown is expected, but this does not necessarily mean a housing crisis.
• Recession is defined by two consecutive quarters of GDP decline, not a housing crisis. It's crucial to differentiate between these terms in client communications.
• A recent survey indicates that many clients fear a recession similar to 2008, but the real estate market is not expected to be the trigger this time.
• The potential triggers for the next recession are trade wars, stock market corrections, and geopolitical events, with housing ranked much lower as a concern.
• Historically, housing prices have often increased during recessions, except during the 2008 crisis. This trend needs to be communicated to clients to alleviate fears.
• Real estate professionals have a moral imperative to educate clients about the economic landscape and dispel myths regarding the housing market and recession.
• Utilizing resources like KCM can provide real estate professionals with the necessary data and tools to effectively communicate with clients during uncertain times.

Questions & Answers

Q: What is Steve Harney's main concern regarding the stock market?

Steve Harney's main concern is not the stock market itself but the language and headlines surrounding it, particularly the frequent use of the word 'recession.' He believes this language can influence client perceptions negatively, leading them to make decisions based on fear rather than reality.

Q: How does Harney define a recession?

Harney defines a recession as an economic slowdown characterized by two consecutive quarters of GDP decline. He emphasizes that this definition does not imply a housing crisis, which is a common misconception among clients influenced by media narratives.

Q: What historical context does Harney provide about housing prices during recessions?

Harney explains that, historically, housing prices have often increased during recessions, except for the 2008 crisis. He provides data showing that in previous recessions, housing prices either rose or experienced minimal declines, contrasting the 2008 situation where housing was a major trigger.

Q: What are the expected triggers for the next recession according to Harney?

Harney outlines that the expected triggers for the next recession include trade wars, stock market corrections, and geopolitical events. He notes that housing is ranked much lower on the list of potential triggers, providing reassurance that the market is not expected to cause the next economic downturn.

Q: How should real estate professionals address client fears about a recession?

Real estate professionals should address client fears by educating them on the differences between a recession and a housing crisis. They should provide historical data and context to reassure clients that the housing market is not expected to be a trigger for the next recession, unlike in 2008.

Q: What role do real estate professionals play during economic uncertainties?

Real estate professionals have a moral imperative to educate and inform clients about the economic landscape. They are seen as trusted advisors who can provide clarity and dispel myths, ensuring clients make informed decisions based on facts rather than media-induced fears.

Q: What resources does Harney recommend for staying informed?

Harney recommends using resources like Keeping Current Matters (KCM) to stay informed. These resources provide real estate professionals with data and tools to effectively communicate with clients, helping them maintain trust and provide accurate information during uncertain economic times.

Q: Why does Harney emphasize the importance of video content?

Harney emphasizes the importance of video content as a means to reach and educate clients effectively. He suggests using videos to address misconceptions about the recession and housing market, as they can engage clients and provide them with clear, concise, and factual information.

Summary & Key Takeaways

• Steve Harney addresses real estate professionals about the impact of recession fears on the housing market, emphasizing the importance of clear communication with clients. He explains that while economic slowdowns are expected, they do not equate to a housing crisis. Professionals must educate clients on the differences.

• Harney highlights that the current economic recovery is the longest in history and eventual slowdowns are natural. He stresses that the media's use of the term 'recession' can mislead clients, causing unnecessary panic and hesitation in real estate decisions.

• The discussion includes survey results showing client fears of a recession similar to 2008, but Harney reassures that housing is not expected to be the cause. He encourages professionals to use data and resources to inform clients and maintain trust during economic uncertainties.