• Home
    • Blog
    • Is the inverted Bond Market a Sign of a Housing Crisis to come???

    Is the inverted Bond Market a Sign of a Housing Crisis to come???


    Just a couple of weeks ago we got the first data that we are in what’s called an inverted bond market and the last seven times we’ve seen an inverted bond market. It’s shown that we’ve entered into a recession. So let’s talk about that today. Hi this is David Pestana owner of Rise Utah Realty in Orem. I want to share with you why I love Utah County join me as we explore the restaurants businesses community events and incredible geography here. This is Utah County life. all right so what is an inverted bond market? Well the government lends out bonds to raise money and the yield is is the return that investors get on it. What happens is that a 10 year bond starts to get less return and the shorter terms actually go up. And this all happens because of uncertainty in the market. Well every time this happens it gets what’s called inverted. And every time it’s happened seven either seven times that they’ve tracked it. It’s caused a recession or what I should say is not a sense cause it’s it’s manifested a recession every time. And when I ask myself is every is well when with that recession happened and the recession generally happens within 16 months of those have in inverted bond markets. So it could be before could be for us that means it would put it into 2020 could be recession year or the beginning of 2021 anticipated timelines. Now if we do enter a recession the big question is is how severe is it. Will the bond markets really don’t predict severity. They just reveal that hey look there’s a lot of uncertainty market and somehow they found this correlation. OK. So we don’t know how bad is going to be. No one’s really talking like disaster. They’re just saying you know we could have a slowing down. And what most people are talking about turning real estate is that we’re going to get what’s called a balance again to where we’ve been in the super strong seller’s market and it’s made the prices go up. We’re gonna have those come down quite a bit. And then here’s the big crux of it. They don’t really think that we’re going to go into the negative housing as far as all the economists and people that are talking about the forecasting for housing is that the housing is really driven by the the job market. And as long as we have good jobs and people are confident about their stability in their job they’ll continue to buy real estate. Now if a big recession happens and complete chaos perhaps people start going unemployed obviously that’s going to change that perception that could affect housing but right now the thought is because of so much demand because so especially let’s talk specifically about Utah because so many people are moving here. We should see a fairly fairly stable demand and we may not have 10 percent year over year. But you know we’ll still have positive is the estimate. OK. Well I hope you’ve enjoyed this episode. Please subscribe and most of all please comment so I can know what you’re thinking if you agree with this thing is a bunch B.S. If you think economy’s going to drop. Let us know and so we can reply to your comments and find consensus on this. Again thanks for watching and again if you need anything please call us for any real estate needs and we’ll be there to help you. Bye. Hey Is David here. Thank you again for watching this video I really appreciate you supporting the content and your involvement please share it with your family and friends so we can keep giving you good stuff and of course as always we are real estate brokers here in the state of Utah. We would love to help you and we have a huge network outside if you need help there to to find you the best realtor but give us a call or direct message just below. Thanks.

    Trackback from your site.

    Leave a Reply