Business bankruptcies up 216% and we are not even half way through 2023 yet! What does this mean for unemployment and the world of real estate?
Clearly, the world of real estate prospers when some underpinning ideas are in place. Lets get into some of that and discuss it in today’s show.
The first step toward a good market is a supply of buyers that are employed and able to take on the debt that comes with purchasing a home. What happens when hundreds of business go bankrupt? Jobs get lost.
Bankruptcies Kill Jobs
A natural side effect of huge increases in business bankruptcies is a drop in the available jobs. With tighter money policies it can also be difficult for new businesses to get the start up funds they need. So while we see bankruptcies up for businesses, we should also expect to see fewer businesses getting started this year.
The net effect will be not only a loss of existing jobs, but fewer jobs coming on line as fewer businesses ever get started.
What might make it better?
Sadly, what is needed is something we cannot really provide at the moment. While businesses prepare for recession, money policies will continue to be tighter. Banks will look for less risk in their lending portfolios – so those wanting to start a new business will have to work twice as hard to get funded… and represent less of a risk.