Economy Forecast for the U.S.
Goldman Sachs forecasts a 30% chance that the U.S. economy will enter a recession next year. Above its previous forecast of 15%, amid record inflation (8.6% annually) and a weak macroeconomic backdrop fueled by the war in Ukraine.
The latest forecast comes a week after the Federal Reserve approved its most significant interest rate hike since 1994, at 75 basis points, to curb accelerating inflation.
Goldman economists state that the Fed has advanced rate increases more aggressively. They also mentioned that terminal rate expectations have risen and financial conditions tightened further. And now they imply substantially more drag on growth.
Goldman Sachs forecasts a conditional 25 percent chance that the U.S. will enter recession in 2024 if it avoids one in 2023, adding that this means there is a 48 percent cumulative chance of a recession over the next two years, up from its previous forecast of 35 percent.
How to Face Recession Investing in Mexico Real Estate?
As the probability of the U.S. entering a recession grows, we find ourselves thinking of what to do to face the impending crisis.
Investments are a mechanism to obtain a profit from a resource that we can maintain for a while. In contrast, savings will only enable us to conserve capital for as long as it is necessary to gather a certain amount to meet specific objectives at a defined term.
The bad news is that static money loses value, even more so in periods of economic crisis. From this, investing is more productive than saving. Considering a crisis can last indefinitely, the capital invested will remain safe but in motion. Obviously, this depends on what you invest.
Cost of Living Comparison
Within investment options, real estate remains the smartest, lowest-risk, high-return option. Most people are unaware that investing in Mexico real estate in times of a recession is an opportunity that will bring benefits for the future. The best way to make the effort of a life become potential in a potential time of risks is to invest it in one of the most basic human needs: housing.
Hidden Costs Comparing Mexico Real Estate vs. Florida Real Estate Prices
We see how various real estate investors are now comparing Florida real estate prices versus the Playa del Carmen properties. I remind the investors of several factors as they do their analysis.
Don’t forget the hidden costs of your analysis.
- What is the day-to-day cost of living comparison between the real estate markets?
- How easy and inexpensive are the transportation and logistics of arriving at your second home investment?
- Are the tourism projections strong in comparison?
- What are the population growth projections for the area?
- What is feeding this growth?
Remember, you may want to flip or re-sale your property in 3-5 years. Since the real estate market moves cyclically. Therefore, it is likely that when you think the market has bottomed out, prices will be rising already. Thus, you will have gained returns and surplus value.
Playa del Carmen and other cities down the and it will also be a great idea to move here because the cost of living is cheaper than any city in the United States now. Below is a chart comparing some of the daily expenses in Miami vs. Playa del Carmen. (Data from Nombeo)