Boston Real Estate
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When the COVID-19 coronavirus began infecting people around the world, many started making comparisons and references to one of the world’s most deadly global pandemics: the 1918-19 outbreak of influenza, which was called the Spanish Flu.
Despite the severity of the pandemic, it is reasonable to say that the influenza of 1918
has almost been forgotten as a tragic event in American history. This is not good, as learning
from past pandemics may be the only way to reasonably prepare for any future.
So I was wondering this morning, (after I shoveled from our recent snow storm) what happened to the U.S, economy after the Spanish flu. And if that saying “History often repeats itself” can we predict what will happen to the nations economy or the Boston real estate market moving forward?
My Economic Summary
Most of the evidence indicates that the economic effects of the 1918 influenza pandemic were short-term.
Despite the Spanish global flu pandemic that killed 675,000 Americans in 1918 and 1919, the United States not only recovered but entered into a decade of unprecedented growth and prosperity. Americans began a spending spree: the Roaring Twenties was on.
But than what happened Next?
We went into the Great Depression. The Fed did it by printing more money. The result by 1918 was runaway inflation. A pair of shoes that cost $3 before the Spanish Flu would cost $10 or $12 after the pandemic.
While the Fed had the right idea, the timing was not good. The surprise post-pandemic inflationary bubble was about to burst. Sector by sector, market by market, prices began to plummet as the once-exuberant consumer demand dried up. Yes, this even included Boston real estate And with interest rates sky high, businesses and Boston real estate buyers couldn’t afford to borrow money to stay afloat.
Even the biggest technological advances of the 1920s—widespread electrification of homes and factories, the introduction of household appliances like refrigerators and washing machines, rapid adoption of the automobile, the growth of commercial radio stations and cinemas—were in development before the Pandemic hit the “pause” button.
The Roar of the Roaring Twenties Is Silenced
Much of the skyrocketing wealth of the 1920s was built on a shaky foundation of easy credit and stock market speculation. The same laissez-faire governing philosophy that righted the economic ship in 1921 failed to avert the 1929 stock market crash and prevent unregulated American banks from going belly up.
After a great exhale following the Spanish pandemic, Americans now faced the Great Depression.
Boston Real Estate and the Bottom Line
I’m sure we can learn some lessons from history. My thoughts once a vaccine people are going to spend money like crazy because there tired of staying at home.
The govt once again push out easy money and keep interest rates low. This will result in Boston condo for sale prices to rise and rise.
By the time the govt sees a problem, they will over react and interest rates will rise. Guess what happens next?
Here’s the good News
If you don’t believe History repeats itself… than we have nothing to worry about.
Source of Information: History.com