Letter to the Editor: Regarding the Economic Forecast

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Regarding the front page article “Good News and Bad News at Economic Forecast” in the issue of Oct. 19: The participants at the Newport Beach Chamber of Commerce Annual Economic Forecast hinted that a recession could be near.

Of course a recession is on the way. My first course at the UCLA Business School was Economics 101 and titled “Business Cycles in an Unstable Economy.” And to be sure, business cycles have occurred regularly during the 70 years since then.

Most recently, upturns have lasted for seven years followed by three years of recession. Our current upturn has now lasted for eight years and the bad news is that the next recession is on the way, perhaps as soon as next year.

The good news is that Orange County has typically followed the national downturn later, has typically felt the downturn less than the nation as a whole, and has typically emerged from the recession sooner.

One thing to remember about real estate is that each downturn is at a higher point than the one before, so holding on is crucial. An example: my first home in Los Angeles in 1953, after graduating from UCLA in 1951, cost $13,000. That house has gone through seven downturns, bouncing back higher every time. That house today is valued at $1.3 million.

 

Martin A. Brower

Corona del Mar

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