| B&T’s readers are split on their concerns about the health of the state’s economy heading into 2019, per this week’s reader poll.
A third of respondents feel Massachusetts will be fine and has “strong fundamentals,” while another third feel “we’re one tipping point away from a recession.” About a quarter aren’t worried about 2019 but have concerns about 2020, and the remaining 10 percent are quite concerned about what the year holds.
The study of economics hasn’t progressed much since Harry Truman famously asked for a one-handed economist – here in the commonwealth there are quite a few “one the one hand … on the other hand” considerations.
The state does indeed have strong fundamentals, but they are imbalanced. Much of the state’s recovery has centered around Boston’s job hub and the best-paying jobs are clustered inside 128. One-third of the state’s economy is gangbusters; the other two-thirds still sees challenges.
As B&T’s readers are aware, 2018 and 2017 were banner years for the residential real estate market – but that kind of growth is unsustainable. While rising rates and inventory levels may help cool the scorching-hot spring markets we’ve seen in recent years, Realtor Anthony Lamacchia predicts in his op-ed on page 5 of this issue that the bidding wars won’t go away.
Conditions that impact buyers and sellers also impact the professionals who assist them in the selling and buying process. Theoretically higher rates and prices mean less affordability, which means a smaller pool of buyers. While the pool may shrink, mortgage originators and real estate agents still need to make a living.
That shrinking pool for now remains theoretical; there is still a strong demand for housing and still a lack of housing development.
We’re always one tipping point away from recession – the problem is no one knows what that point is until we’ve already tripped over it. The list of potential tripwires is long in this first month of 2019: the government shutdown; trade wars and tariffs; foreign investment in commercial real estate; Brexit; Democrats in the House and Republicans in the Senate – the list of things we shouldn’t worry about is much shorter than the list of those we should.
As for the queasy 10 percent – either those readers are inherently pessimistic, or they’re all onto something the rest of us can’t get see, and we’ll be eating these words in a few months.
The quarter of readers feeling pretty good about 2019 but leery of 2020 are probably on the right track. 2019 feels like a year of transition and change – for better or worse.
