How can mobile home parks help investors maintain their finances during the tough times which may be ahead?
Billionaire mobile home park investor Sam Zell has predicted an imminent recession within the next 12 months. He is not alone.
While The Fiscal Times is a little more bullish than the rest of the crowd, many media outlets including the Huffington Post have suggested 2016 is going to see ‘Judgement Day’ for the US economy. Barrons says “It’s at least 2 to 1 that we’ll be in a recession at the end of 2016.” A December 2015 report from Citi Research puts “the probability of the US entering a new recession at 65 percent.”
All the data seems to back these predictions of a 2016 recession up too.
A recession is identified by two consecutive quarters of shrinking economic growth. MSNBC estimates the last recession ended in June 2009.
Investopedia reminds us that the S&P had risen 92% between 2010 and 2015 alone. Many point to financial issues in Europe and China as sizable dangers to the US economy. IBT points to Bureau of Labor Statistics data showing the lowest labor force participation rate in 15 years. The wage pains, and lack of pay check gains are no secret to anyone.
While even the Federal Reserve Bank of San Francisco appears to struggle with differentiating a depression from a recession, there may be little need for all out panic.
Recessions as with other sector specific downturns are often self-fulfilling prophecies. Given the above analysts’ outspokenness and media coverage, the odds of a recession by the end of 2016 may be far closer to 90% than 65%. The fact that many individuals and businesses have locked in low interest rates, and there has been mountains of equity capital poured into markets over the last seven years suggests there is no need for a new foreclosure crisis or complete meltdown. On the other hand when things start sliding they often snowball. And this will be the perfect “I told you so” moment for many pessimists who have doubted the recovery.
What most commentators are most concerned about is that the Fed and central banks have little in the way of tools to work with to avoid a recession, or deal with one.
It may not be doom and gloom for everyone, but a fresh recession will put many in a bind just as they thought they saw some light at the end of the tunnel, and it will absolutely fuel a surge in conservative living.
Sam Zell has said none of his businesses offer the promise of his mobile home park company. We all know Warren Buffett is one of the other biggest manufactured home investors, and remains incredibly bullish on US real estate. They know that mobile home parks are currently a fantastic investment, whether or not there is a recession.
If there isn’t a recession investors are still getting into an asset class which appears to offer the most value, room for growth, and protection from the downside. If there is a recession in 2016 and beyond there will only be an even larger surge in demand and need for mobile home park living, and investments.