Archive for the 'Economy' Category
Ten years ago we published Strategies to Navigate 5 Stages of the Housing Cycle. To commemorate the 10-year anniversary of those analyses, we are sharing the graphic we produce each month that shows where 33 major markets are positioned in that cycle.
Recent studies have found that saving for retirement has become a bit of a financial afterthought, as more Americans are actually saving for an upcoming vacation than they are for economic security in their golden years. In fact, a 2017 NerdWallet survey found that 56% of young women between the ages of 18 and 34 aren’t saving for retirement at all.
But having a lack of fiscal foresight isn’t limited to the young; a newly released Fannie Mae study has found there’s been an increase in set-to-retire Baby Boomers who have outstanding mortgage debts to worry about.
Online retail giant Amazon Inc. has received multiple offers of tax breaks as a part of the company’s national competition for Amazon’s second headquarters. According to Reuters, the HQ2 competition came to an end on Thursday, October 19, and will include up to 50,000 new jobs and a $5 billion investment for the winning city. Not only that, but housing prices in the chosen land are expected to rise considerably.
The aging in place movement has prompted many seniors to look to the future and make changes so that they can remain in their homes and live full, uninterrupted lives. But even though the movement has allowed many seniors to have a better quality of life, it’s arguably had another unintentional effect: it may be having a negative impact on the U.S. housing market. And Millennials are taking the brunt of the blame.
Due to seasonal changes in demand, the housing market is difficult to pin down. And with today’s ever-changing political and economic climate, it’s even more exhausting trying to get a clear picture of what’s to come.
That being said, so far in 2017 one thing has been very clear: supply is low, demand is high.
According to Forbes, there are a few more facts we can ascertain based on past trends and new housing market research.
According to the VIX index — which is known as the “Fear Gauge” — investors are feeling calmer about the stock market than they have in 25 years.
This “Fear Gauge” is at it’s lowest since 1993.
And professional traders are scared out of their mind.
Why would that be?
The combination of inflation and low mortgage rates usually leads to much higher compounded rates of home appreciation. For owners of property, high rates of inflation and appreciation are welcomed and appreciated. For buyers or tenants, however, the skyrocketing purchase and rental prices are not liked much at all.
Sweeping changes in the nation’s demographic makeup will have profound effects on the nation’s housing industry, according to “Big Shifts Ahead: Demographic Clarity for Businesses,” a new book by authors John Burns and Chris Porter.
They argue that broad demographic shifts will reshape housing in America in the next decade, creating new opportunities for businesses of all kinds. Rising numbers of female executives, affluent immigrants, growing numbers of younger and older workers and a ballooning retiree population will have a profound influence on residential real estate in the U.S. over the next 10 years, according to Burns and Porter.
Small is Big!
If you own one investment property you are a significant investor and contributor to the American economy. The engaged (as opposed to “aspiring,”) real estate investor population is estimated to be at 11.1 million individuals and companies. Together this tier of investors owns $3.1 trillion in single-family residential (SFR) asset value representing 13.3 million homes.
How will the real estate market be impacted by Donald Trump’s victory and Republicans controlling both chambers of Congress?
Though Mr. Trump is a real estate man, his policy platform has been largely vague on real estate proposals. Here are my thoughts on how certain real estate issues may play out under President Trump and of their potential impact to consumers.
Trump has a 10-point lead on Clinton when Americans are asked about which candidate will spur higher home prices. Primary results also suggest candidates weren’t popular in places where housing prices had a strong recovery.
So of the two presumptive major-party nominees for U.S. presidency, whom do you think will be best for housing prices? The self-described successful real estate executive Donald Trump? Or the former U.S. Senator, first lady and U.S. Secretary of State, Hillary Clinton?
Look, I’m going to level with you. I think we’re screwed.
We all saw what happened last week because of “Brexit” (British Exit). The markets are in uncertain territory.
Add inflation and the potential for recession – this situation becomes even more complex.
People are tightening their belts.
You do not need a degree in economics to become market-literate, just an understanding of how local real estate economies work, fluency with the terminology and good sources for local data on sales, prices, values, and inventories. Add your professional expertise and your skilled observations of the latest trends in the charts and numbers and you have a winning formula.
Home-buyers rejoice when interest rates drop, but rising interest rates can actually be a good thing for investors. Because high rates make homes less affordable, the rental market improves, giving real estate investors a chance to improve cash flow and increase their return on investment.
How does the economy really work?
This simple but not simplistic video by Ray Dalio, the founder of Bridgewater Associates, shows the basic driving forces behind the economy, and explains why economic cycles occur by breaking down concepts such as credit, interest rates, leveraging and deleveraging.