I’m writing this as much for myself as I am anyone else... I am an Economics junkie – always have been.
With the lower than expected jobs numbers released last Friday, there are really smart folks who think the numbers might actually be off because of some complicated seasonal adjustments /equations. They could be right, but the seasonal adjustments are not so far off as for the jobs numbers to be completely ignored.
To me, the more interesting numbers, are the Daily Growth Index (started in 2004) and the Bureau of Economic Analysis (used by the White House). Unlike jobs numbers that are only looking at Jobs, this index looks at “REAL” Leading Economic Indicators. These reports indicate the beginning of a “W” to me (as opposed to a “V”)…
One of the biggest factors I don’t hear Economist discussing is that we “ducked” a full depression because of all of the Government Stimulus last year. That Stimulus added at least 2 percent to GDP. If that stimulus goes away (as it is suppose to do by the 3rd Quarter of this year) then where does that leave us…
One economist I read recently quoted Bob Dylan, “There’s A Slow Train Comin‘…” I agree, and I don’t think we will be positive GDP at the end of 2010 – at best, I feel we will be “neutral.”
Bottom line, we have three choices when it comes to our Economic Future. We can reduce our Private Debt, reduce our Public Debt, or run a Trade Deficit. We can not do all three at the same time, and we must choose a path.
No matter WHICH path we choose to tackle first – we will not be able to ANYTHING positive without tackling our Energy Policy. I think the next huge debate on Capitol Hill could be how high the Gas Tax is going to be – some think .09 cents per gallon should go to 9 DOLLARS… all those Ga-Gillion Gallons of Oil we watch daily pumping into the Ocean are going to force this discussion, and that “tight rope” our Economy has been on just got SLIPPIER!
See these “W’s” in the Four Bad Bears?? I think it’s possible that before we head completely out of this “Bear”, we will hit one more “W”. Maybe not a big one – but I think there’s no doubt that’s what’s coming.
SO – what does that mean for the housing market, and what we should be telling customers? I think we should be saying the exact same thing the “talking heads” on CNBC are telling Investors. At this point, I think we all know the difference between a House (as an Investment) and a Home… For most Americans I know, if you are IN a Home – and you can afford to stay there, do so.
Be “in the housing market” for the long term. If you are in for the long term, the daily, monthly value movements won’t matter because after this next bump – we’ll be heading in the right direction.
If you are trying to “short the market” be careful! There’s a TON of money to be made in Real Estate right now. Anytime there’s this much confusion, pain, and volatility there’s going to be people making MONEY. But shorting the market should be done by professionals!
More than ever, people need a professional Realtor to help them with their Real Estate Investment. Period. We have more Volitility ahead – and consumers NEED Professional, Informed Realtors, because there are huge questions from the information above.
If we ARE going to tackle our Energy Policy – what does that mean for Real Estate in more Rural Areas? Is there going to be a higher demand for property in high density, or “rail ready” areas? I think Agents should be considering how these Economic factors are going to affect the Real Estate Trends in your local market.
As I said, I am fully considering these factors for our business as well. We get more than 60% of our business from USDA Home Loans. Purely based upon the market, and the Economic Trends – and knowing that there are people making MONEY in this market, it’s important to be WHERE the money is being made… and to anticipate a potential shift. If you have questions, call Steve Thorne, Mortgage Banker in Cary in Cary 919-649-5058