Real estate, oil and the employment numbers are all telling us the same thing, and that is really bad news for the U.S. economy. It really does appear that economic activity is starting to slow down significantly, but just like in 2008 those that are running things don’t want to admit the reality of what we are facing. Back then, Fed Chair Ben Bernanke insisted that the U.S. economy was not heading into a recession, and we later learned that a recession had already begun when he made that statement. And as you will see at the end of this article, current Fed Chair Jerome Powell says that he is “very happy” with how the U.S. economy is performing, but he shouldn’t be so thrilled. Signs of trouble are everywhere, and we just got several more pieces of troubling news.
Thanks to aggressive rate hikes by the Federal Reserve, the average rate on a 30 year mortgage is now up to about 4.8 percent. Just like in 2008, that is killing the housing market and it has us on the precipice of another real estate meltdown.
And some of the markets that were once the hottest in the entire country are leading the way down. For example, just check out what is happening in Manhattan…
In the third quarter, the median price for a one-bedroom Manhattan home was $815,000, down 4% from the same period in 2017. The volume of sales fell 12.7%.
Of course things are even worse at the high end of the market. Some Manhattan townhouses are selling for millions of dollars less than what they were originally listed for.
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