Last week we were told we are officially in a recession. That brings up a question: Just what good are recessions, anyway?
The biggest benefit is that they drive down inflated prices, a task this recession is carrying out with cruel efficiency. When prices get so low that buyers can’t resist the bargains, buying activity resumes, and the cycle begins anew.
The good news is that we’re seeing that occur already. Despite terrible retail sales generally, Black Friday results were better than anyone expected, thanks to one thing: low prices. And even Los Angeles’ beleaguered homes are now priced so low they’re moving briskly.
As you can see in the real estate section of the current issue of the Los Angeles Business Journal, the number of homes that traded hands in November in L.A. County was 48 percent higher than the same month last year.
These examples are the early stirrings of the recovery that will follow.