Is a Recession Coming? Florida real estate investing strategies

Have you ever wondered if an economic recession is just around the corner? In Episode 9 of our podcast "Everything About Wealth" (available on YouTube), my partner Desiree Troncoso and I interviewed Dr. Joshua Harris, an economist with extensive experience in finance and real estate. This article expands on that conversation, delving into the current state of the economy, its impact on real estate investment, and how you can prepare for any scenario. If you’re part of the Latino community in the U.S. seeking financial stability, you’ll find valuable insights here to navigate the real estate market and beyond.

The Current State of the Economy: Expansion or Slowdown?

Dr. Harris kicks off with a key fact: we’re in the longest period of economic growth in U.S. history, spanning over 10 years since the last recession, even surpassing the famous boom of the 90s. This milestone, reached last July, is impressive but also raises questions. When will this cycle end? Harris explains that it’s natural to expect an economic recession after such a long run, and we’re already seeing signs of a slowdown. GDP has dropped from 3% to 2%—still solid, but lower—and business investment, which was robust in 2018, has turned negative since Q2 of this year. Trade wars and global uncertainty are holding companies back, making them hesitant to invest in new plants or hire more staff.

Does this mean an economic recession is imminent? Not necessarily. Harris suggests we might be in a “micro-recession” in sectors like manufacturing, but there’s no evidence yet of a severe macroeconomic downturn. However, the likelihood of a mild recession in the coming years is increasing. For Latino investors in the U.S., this presents an opportunity: how can you leverage this uncertainty to strengthen your portfolio, especially through real estate investment?

The Yield Curve: Real Harbinger or Just Noise?

One topic dominating headlines is the yield curve inversion, an indicator many tie to an economic recession. In simple terms, it happens when short-term interest rates (like 90-day rates) exceed long-term rates (like 10-year rates). Harris describes it as a reflection of investor fear, driving them to seek safety in long-term government bonds. Yet, it’s not a precise predictor. Historically, recessions have followed these inversions, but the timeline can range from months to two years. This time, Harris believes it’s more tied to global factors—like Brexit and the Asian slowdown—than U.S. domestic issues. “We’re the best economy in the world right now,” he says, attracting foreign capital and skewing the traditional signal.

For those exploring real estate investment, this means don’t get swept up in media panic. Instead of waiting for a drastic drop, consider long-term strategies that capitalize on the sustained economic growth of the U.S.

The Real Estate Market: Vulnerable or Resilient?

The real estate market is a cornerstone for many Latino investors in the U.S., but its performance during an economic recession always sparks debate. Harris acknowledges that any economic contraction—less production, less spending, layoffs—impacts real estate demand, from apartments to offices and retail spaces. However, he contrasts the 2008 recession with today’s scenario and finds key differences. In 2008, subprime mortgages and massive overbuilding created a “perfect storm.” Today, after a decade of strict regulations and tight lending standards, the real estate market is on firmer ground, with less overdevelopment and an undersupply in many areas.

“In Orlando, the first downtown office building since the recession is just now under construction,” Harris notes. This undersupply could be an advantage. If a recession hits, the impact might be mild, and the real estate market could even attract more capital as investors seek stable, tangible assets. For those considering real estate investment, this suggests the time to act is now, not waiting for a crash that may not mirror 2008. At Coso Cap, we offer investor loans like DSCR loans and rental property loans, perfect for funding projects in this climate.

Opportunities in Florida Real Estate Investing Strategies During a Slowdown

So, which real estate asset classes hold promise? Harris stresses a long-term view for Florida real estate investing strategies. “Recessions are short-term events, but real estate is a long-term investment,” he says. He advises focusing on supply-and-demand fundamentals. Markets with growing populations and job bases—like many in Florida—offer opportunities in affordable housing, senior housing, and self-storage. “If there’s a need, someone can make money renting it out,” he asserts.

Affordable housing is a critical point. Harris critiques policies like New York’s rent control, which discourage construction and benefit only a few. Instead, he advocates for more tax credits and opportunity zones to spur development. For Latino investors, this might mean exploring multifamily properties or small commercial units. If you need financing, check out CosoCap.com for investor loan options to help you enter the market.

Business and National Debt: Latent Risks?

Another concern is debt. Business debt has risen, but low interest rates keep payments manageable. If rates spiked, leveraged companies could struggle, but for now, refinancing mitigates the risk. More worrisome is the national debt—around $20 trillion, not the exaggerated $50 trillion some claim. Harris explains that as long as economic growth and inflation persist, the system can hold. However, the aging Baby Boomer population and declining birth rates pose a future challenge for Social Security. “Once that generation passes, it could stabilize,” he says, but that’s decades away.

Practical Strategies for the Latino Investor

What can you do today? First, don’t freeze up over fear of an economic recession. Harris suggests using a slowdown as an entry point—cheaper properties, more affordable debt—without altering your long-term strategy. Second, diversify. Pair real estate investment with other options, like bonds or small businesses, to reduce risk. Third, educate yourself. Resources like our podcast and sites like CosoCap.com offer tools for smart decision-making.

If you’re seeking financing, Coso Cap provides investor loans and personalized advisory services. Call us at (407) 203-9599 to explore how to build your financial future, whether through a rental property or a commercial project.

Conclusion: Prepare, Don’t Panic

An economic recession will eventually come—it’s part of the cycle—but the real estate market and U.S. economy are better positioned than in 2008. For the Latino community in the U.S., this is a time to act wisely, not wait. Listen to Episode 9 on YouTube, follow us at @everythingaboutwealth, and visit CosoCap.com for more resources. With the right strategy, you can turn uncertainty into opportunity and secure your financial stability.