In the years since The Great Recession, the economy has rebounded, and real estate has enjoyed a good recovery. However, buyers have been cooling their jets in many areas, and have become more hesitant to pay sellers their current asking prices when purchasing real estate, and this has many people wondering if we are either now at or nearing the peak of this current rally in real estate values. Then when you combine this with the recent uncertainty within the stock market, and companies and industries beginning to feel the financial pinch, it can all have us wondering where our economy is really headed.
With this in mind, the debt restructuring industry had fallen on lean times, because when the economy and businesses are doing good, there’s less of a need for debt restructuring. However, that industry is looking at the transition that’s been going on, and they’re now gearing up to get busy once again with what they believe will be a new, incoming wave of demand for debt restructuring.
In a recent article on the subject, Reuters reported that debt restructuring experts are gearing up for what they believe could be a solid wave of demand for debt restructuring beginning in 2019, and then lasting for years. In fact, one leading industry executive was even quoted as saying that their company is now recruiting people heavily, in anticipation of this coming wave.
In addition to the overall uncertainty within the stock market and the challenges that businesses have now been facing, the anticipated rise in interest rates is expected to put even more strain on businesses, causing more of them to then need to restructure their debt.
Keeping this in mind, one additional industry executive said that “In the last five years, if companies had a credit issue, they solved the problem by issuing new debt. However, they won’t be able to do that anymore, and the outcomes will then be debt restructuring combined with the sale of distressed assets.”
Putting all of this together, we all know that both the economy and the real estate market have their own cycles, and their own transition periods within these cycles, too. In looking back through these cycles over recent decades, once the buyers begin to cool down, and begin pausing before spending their money, this is usually an indication that we are at or near the peak of the upswing in this cycle. However, oftentimes when an upswing is going on, people can begin believing that this one particular upswing will never end and that the current upswing simply has no end in sight.
But do your homework, look for any clouds that you may see on the horizon, and make your best, most well-informed decisions when moving forward.