I have been getting a lot of questions lately about the state of the state economy, the national economy and the world economy for that matter. Uncertainty is in the air and it has a lot of people of various economic backgrounds and business owners/managers wondering what if anything should they do. The overwhelming trend I am hearing and experiencing is, “we are going to wait and see what happens before we make a move.” So what is the worry, where is the rub and what is the cause of all of this hesitation?
For many it is the painful memory of an economic downturn in Alaska in the 1980’s; for others who did not experience that, it is being told that our economy is going to be worse than the economic downturn in the 1980’s. So the fear of what has not yet and is about to happen has men, women and business literally stopped in their tracks and unable to move forward as they don’t know if we will have a budget deficit, a balanced budget or some other local/national/global catastrophe to deal with; staying stuck where they are is better than venturing out into the future unknown.
This is further emphasized by the recent poll released by the Anchorage Economic Development Corporation about the level of consumer confidence in Alaska, which by the way is the worst it has been in years, meaning the average Alaskan citizen is very un-optimistic about what the future economic conditions hold for our state. And who can blame that person? We have a Legislature that has been so unwilling to address the budget deficit head on that it is any wonder how our state is functioning in the present. Standard and Poor’s and Moody’s continue to downgrade the State of Alaska, which makes it more difficult for investment to flow into our state and makes it more difficult for our state to borrow money to stimulate the economy, something that no state or government can ever stand to rest on their laurels about.
So what is the silver lining to all of this?
Making music from all of the noise that is bombarding our phones, computers, and newspapers. Precisely speaking, it is taking more calculated risk, not less. When economic downturn came to states like Michigan, Nevada, and Arizona after the banking crisis of 2007/2008 many US citizens were put out of work, jobs and homes. At the same time other US citizens went to work, created jobs and bought homes. Some bought entire blocks and entire neighborhoods and created very successful real estate enterprises helping those who lost their homes get back on their feet by increasing the number of rental units available to those who could no longer afford to own a home as they dug themselves out of the recession.
As you consider the noise of Brexit (Britain’s exiting the European Union), the state Legislature’s inability to make the hard choices for our future, terrorism nationally and globally and the lack of positive outlook on the future economic situation, know this: There are individuals just like you and me poised to take advantage of an economic downturn or job loss. Out of the ashes of layoffs and downsizing will come people who will take their challenges on with entrepreneurial vigor and start businesses creating new products and services that people need and want. Out of the pain of being forced to relocate, sell or foreclose on property, Alaskans will move out, move on and move forward. Some choosing to stay in Alaska, while others will move to places where they can receive support from family and friends as they work their way back to economic stability. And most importantly others will see the state of money and its availability and will leverage their assets to purchase real estate, multi-family units, commercial buildings and other types of real property at great value and continue to build the local and state economy and benefit from it over the long haul.
Now is the time where those who are creating a symphony of investments will add additional instruments to their economic foundation and diversify themselves into more financial certainty not less. So let the noise of now become your symphony of tomorrow. You have all the tools and power that you need and if now is the time to start consulting with your Realtor, financial planner, CPA and lender, then put energy into NOW for your tomorrow.
RMG Real Estate Experts
Keller Williams Realty
Note: Michael King is the Associate Broker at RMG Real Estate Experts/Keller Williams Realty. He holds a Bachelor of Science in Apparel and Textile Design from Michigan State University and a Master of Science in Global Supply Chain Management from University of Alaska Anchorage. He is a published author and active participant in the development of the Anchorage economy and in building a better community for future generations to enjoy.