If you were to ask me that question last month, I could have answered it with far more certainty and conviction than I can now. Prior to the events of Sept. 11, the real estate industry was shining brightly as other sectors of our economy were sagging. Precisely what effect the post-terrorism ecomony will have on our local market is at best uncertain.
According to the economic forecasting firm Case Shiller Weiss, projected real estate prices are being lowered in 18 out of the 20 cities it tracks by an average of 3 percentage points -- compared to an expected rise of 2.4 percent nationally.
The results are diverse, however. San Francisco and San Diego are expecting dramatic declines, while logic dictates that Washington D.C. should follow suit. But the vagaries of the real estate world once again display their colorfully varied plumage. The oft-contrary capital continues to flourish with prices continuing their upward trend.
The overall market has been dragged down, and economists differ over the depth and length of what might be a short-term downturn. According to David Lereah, chief economist with the National Association of Realtors, the stock market will drop from its current 6 percent sppreciation. But it will regain its earlier level once military spending kicks in and if interest rates remain low.
As with other cities, the effect on the revitalization of Cincinnati's downtown in tandem with the socio-economic malaise we're already in probably doesn't bode well. It's important to note that while real estate has taken the proverbial blow on the chin, prospects are good that it'll be a short count before the market becomes stimulated once again and confidence rises.
Historically, when we enter a recession or the stock market crashes, real estate prices don't go down significantly. This is especially true in areas where defense and related industries have a significant presence.
All things considered -- and with deep and appropriate respect for the tragic events of September -- it's important to note that a potential and unintended consequence might be an accelerated recovery from the decline some indicators were pointing us in.
To date, I haven't seen anyone doubt the veracity of the Federal Reserve to continue the downward pressure on interest rates and at all cost. Combined with a variety of government stimuli, some of which have already been enacted, and an economic rebound likely to occur in the spring or early summer, 2002 is fortified.
Pragmatically speaking, the skepticism and near panic reactions that have dramatically affected other sectors have left the housing market relatively unscathed. Whether buying or selling, the prospects for success continue to remain only slightly less robust; especially if Cincinnati continues to follow the path it has on many occasions in the past.
If the old adage attributed to Mark Twain about being here because everything happens 10 years later proves true, then there's not a lot to be concerned about. Now might be the best time to pursue your dream or move on to the next one.
