Stability tends to be an undervalued trait in investment assets. Though this seems counter to the nature of investing, investors are guilty of chasing the highs of the industry. Whether it’s knowing that high risk yields high rewards or simply the human need for a thrill, we’re attracted to high-octane investing.

If you look at the headlines, you’ll see people questioning the wisdom of investing in real estate in the current market climate. And we won’t lie, things are different now. And while “different,” may mean pivoting to address new challenges, it doesn’t make investing in SFRs any less valuable than it always has been.

The “Housing Theory of Everything” proclaims that housing is the single biggest factor driving our economic climate, including the persistence of wealth inequality. Those who own homes and other properties are ahead of the average American, as they can establish and grow equity. Real estate has long been the greatest generator of generational wealth, and that hasn’t changed.

If you live in the United States, you’re feeling the pains of rising inflation. In December, U.S. inflation hit a rate of 7 percent for 2021 – the highest it’s been in forty years. You’ve likely felt its impact in your day-to-day life, from the gas pumps to the grocery stores.

If you’ve kept your finger to the pulse of financial news, you’ve no doubt heard the term “stagflation” with increasing frequency over the past several weeks. Stagflation is a portmanteau of “stagnation” and “inflation.” The phenomenon is defined by a lack of economic growth combined with higher-than-usual inflation rates.

Although COVID-19 still poses a threat to public health, vaccination rates and the lifting of mask mandates have given American life a renewed sense of normalcy.

Are you ready for The Grind?

The U.S. economy has been in a state of flux this year. Between the yo-yo of the stock market, a manufacturing slump, and the trade war with China, fears of a recession within the next year are not entirely unfounded. Different sources and economists tend to disagree on whether or not a recession is in the future — after all, the stock market is back to record highs after last month’s big scare. 

“Recession” is a dirty word in real estate investment. When we hear it, we tense up. We can feel our hearts stitch a little bit. Our memories of a recession are still fresh. For many, the wounds are raw and the effects are still felt even a decade later. The Great Recession, as many have come to call it, rocked the housing market beginning in 2008 and hit its full stride in 2009 and in the years following.

At the tail end of 2007, America rang in a recession alongside the new year. This economic downturn officially lasted until June of 2009...though many negative effects having continued to linger well into 2015.  As it’s been one of the most significant economic crises in the United States in the last century, many now call it “The Great Recession.”

As real estate investors, it’s vital to pay attention to the economic climate—not just in our local markets, but in the U.S. as a whole.

We still struggle with the aftershocks of the recession. Its causes, recovery, and future are intrinsically tied to the real estate market, unlike that of recessions past. Especially as so much is hinging on the housing market, now more than ever, we should strive to understand how it happened and where we need to go from here.