BY HEINO MOLLS
There is a lot of talk about the economy slowing down these days. Many people are pointing to signs of a recession. I hear a good deal of doom and gloom about job losses in the months and years ahead. This is not idle chatter, we are told. There are definitely some signs out there.
The automotive industry, one of the country's greatest economic drivers, is in the midst of job layoffs. An entire automobile line (Oldsmobile) has been canceled outright. And as I was reminded the other day, one in five jobs in Canada is related to the auto industry.
Many technology companies and stocks, the darlings of our current industrial age, have taken a swan dive in the stock market. Dot com companies, in particular, have gone under and taken a lot of investment money with them.
Given these two signs, a lot of economists say that we are in for a rough ride ahead. Now this is serious stuff. And far be it for me to suggest that the experts are wrong.
But I think they are wrong. And here is why.
First of all, if we are going into a recession, no one is going to be surprised. Recessions historically happen when no one expects them. I have never seen the business world so ready for a recession. Economic analysts have been calling for it for the past five years. It seems to me that they want so badly for it to happen, they will jump on any reason to call it. It just seems too contrived to me.
It occurs to me, that the automobile industry is currently in one of the most healthy, competitive states it has ever been in. Slumping sales? You bet. Nobody's wants to buy an Oldsmobile.
But don't tell the folks at Chrysler who designed the PT Cruiser. They can't build them fast enough. If you want to sell cars, you better design and market something people want. The public is very discriminating today.
Dot com company dives? Well, sure. Investors scrambled to get into anything related to dot com business. Like the pet food online company that lost millions and recently went under. If any of these investors had really stopped to think about it, they might have concluded that most pet owners are not going to buy pet food on line. Most of them have time to get it themselves. They'll go to the store and take the friggin dog with them. We' re not all busy investment people okay? Busy investment people don't have pets.
There are lots of Internet-based companies that provide valued products and services. Like property information used by Realtors. But for every one of them, it seems there are about a dozen scams. Investors should have stayed away from these hair-brained schemes.
I think we have too many experts out there who don't know anything about human nature.
It seems to me that there is only one industry that is the true measure of the economy: real estate.
I am at a loss to name another industry that drives our economy to a greater extent than real estate. Lawyers, furniture makers, builders, renovators, mortgage lenders, driveway sealers, brick layers, drapery installers, cable operators, appliance retailers, mattress makers, carpet manufacturers, carpenters, plumbers, lawn mowers, movers, and yes automobiles! I could go
on all day. The list of goods and services that home buyers affect touches everything.
It is true that one in five jobs in Canada is related to the auto industry, but five out of five jobs are related to homes. No other market drives the economy greater than that of real estate.
Right now, there are so many indicators of a robust real estate market, there are too many to describe in this space. But here are just three.
The maturing baby boom generation inheritance is only just beginning. There is no accurate figure of money that is about to be passed on to the world’s largest demographic, but it is estimated to be in the billions in Canada and trillions in the United States. Can you imagine the purchasing power this money will unleash on the North American economy?
Canada Mortgage and Housing Corp. statistics tell us that 60 per cent of all homes in Canada are mortgage-free. That in itself is a stunning amount of capital ready to be used in our economy.
Immigration to Canada is at an all-time high. People who are ready, willing and able to work, care for their families and consume products and services. And all of them share the singular dream, to buy their own home.
For all the financial forecasters, economic experts and accounting gurus out there, I have only one small suggestion. Do you really want to know what's going on out there?
Call a Realtor.
Heino Molls is publisher of REM: The Real Estate Magazine.