2014 Business Predictions For Real Estate Investors
My prediction for 2014 is quick. "More Fed. impulse ahead causing mal-investment in local asset bubbles". I'll say that again but in English this time: Folks do stupid things with fast money and there's a lot of easy cash wafting around. Therefore when you get some of this easy cash do not be foolish with it!
The current level of prosperity in the US is being powered by the "wealth effect" which is fueled by massive central authority stimulus propping up asset prices (usually the stock market and to a much smaller degree the housing market as well). The prosperity feels real from the standpoint that people are spending money again. Nonetheless this is a game of musical chairs and you won't wish to be the last one standing.
Commercial impulse through the printing press is like taking a drug that causes you to feel great till the buzz wears off; then you've an economic hang-over worse than your original problem. I think we are at the end of the economic hang-over made by the last bust and boom cycle and we are just ramping up the enraptured feeling of the prevailing QE (i.e. Money printing) infinity inflationary cycle.
The following are my specific forecasts about what is coming in 2014. Very few people are bold enough to make categorical predictions as the more specific you're the less complicated it is to be wrong (and most people hate being wrong). Take these predictions with a grain of salt. Forward this to your friends and use it as a conversation starter. You can use the dialogue to make up your own forecasts for the year. I wish to hear your feedback.
2014 Economic Predictions for Property Investors
Property hires, wages, food, IRs and energy prices will rise tolerably in 2014.
Gold will trade between $1150 - $1450 and silver will trade $18.50 - $23.00.
I foretell 30-year owner occupied mortgage interest rates to go up to 5 percent by July and hover in the low fives through the close of the year. Business mortgage rates will be lower than residential mortgage rates because commercial banks will remain flooded by cash and have nobody to loan it to. Home interest rates will creep up as the governing body withdraws impulse from that part of the market in an attempt to moderate housing price growth.
Wall Street funds that acquired large portfolios of repossessed homes will start to liquidate their single family holdings on account of increasing adjustable rate mortgages. (Many Wall Street investment funds purchased homes with short term adjustable rate loans and those loans are either coming due or are having a look at the likelihood of rising rates.) These The Street funds never meant to be permanent landlords (and they aren't very good at it). With home costs up this is a very good time for these funds to start cleaning up their portfolios by liquidating their most troublesome and most price inflated properties. The release of this inventory will put a downward price pressure in those markets who had the highest rates of appreciation from the trough. I might be particularly cautious about creating a position in Las Vegas, Phoenix, San Francisco Bay and Southern California and if I already had a large profit tied to a property in one of those markets I'd consider exchanging out of it.
I remain a massive fan of the Dallas-Fort Worth metro. I do have a personal bias for letting you know about that market as we are building and selling rental homes in Dallas and Fort Worth, but there are many other smart folks who are awfully bullish on Texas. Visit our website for a great video by the North Texas Business Commission why the DFW economy is at the beginning of a long-term upwardly trending market.
I am also attracted by Charlotte, Denver, Atlanta, Miami, Tampa, Washington DC metro, Portland, and Seattle but not nearly so much as I like Texas. I foretell all the major cities and tiny oil towns in Texas will have 6-10% housing price and rent increases with lower rates of vacancy (6.5% vacancy or less).
Bitcoin will get more media interest, but its pricing will become far more uncertain such that only the black market economy will actually. Accept it for payment. Executives around the globe will find how to tax bitcoin.
Stock prices will become highly unsteady in 2014. Watch for heart wrenching price swings of 10-15% up and down in a stated month. Stock traders will make record profits in 2014. Stock speculators will end the year sideways or down.
The rate of unemployment is far worse than the published numbers because many people who have expired off of unemployment benefits and have stopped trying to find work, or they have moved onto the rolls of Federal disability. States pay for unemployment benefits but the Fed pays for disability so money strapped states are moving folk off unemployment benefits and onto Fed. disability benefits as a way of balancing their budgets. Those on incapacity are not counted as jobless.
Expect to see a unwaged industrial recovery. The gap between the affluent and the poor will expand as the affluent earn money by owning assets which are rising in price while the poor earn cash selling their time but there'll be fewer and less roles for amateur workers because of increased environmental protection legislation and higher minimum wage laws. "The easiest way to help the poor is to not be one of them. " â€"Laing Hancock
2014 will be a wealthy year for many. Be careful not to sucked into hopeful investments because fiat currency will be causing mal-investment everywhere. When you are looking for a fast read on how fiat currency manipulation leads to bad decision-making I strongly recommend reading "The Clipper Ship Methodology" and "Whatever Happened to Penny Candy" by Richard Maybury.
A guru of mine once said, "There is not any such thing as a bad economy" You can only ever be skilled or unskilled in your interplay with the economy.
[Editor's Note: Be certain to see our new Better Business Bureau Review].
The current level of prosperity in the US is being powered by the "wealth effect" which is fueled by massive central authority stimulus propping up asset prices (usually the stock market and to a much smaller degree the housing market as well). The prosperity feels real from the standpoint that people are spending money again. Nonetheless this is a game of musical chairs and you won't wish to be the last one standing.
Commercial impulse through the printing press is like taking a drug that causes you to feel great till the buzz wears off; then you've an economic hang-over worse than your original problem. I think we are at the end of the economic hang-over made by the last bust and boom cycle and we are just ramping up the enraptured feeling of the prevailing QE (i.e. Money printing) infinity inflationary cycle.
The following are my specific forecasts about what is coming in 2014. Very few people are bold enough to make categorical predictions as the more specific you're the less complicated it is to be wrong (and most people hate being wrong). Take these predictions with a grain of salt. Forward this to your friends and use it as a conversation starter. You can use the dialogue to make up your own forecasts for the year. I wish to hear your feedback.
2014 Economic Predictions for Property Investors
Property hires, wages, food, IRs and energy prices will rise tolerably in 2014.
Gold will trade between $1150 - $1450 and silver will trade $18.50 - $23.00.
I foretell 30-year owner occupied mortgage interest rates to go up to 5 percent by July and hover in the low fives through the close of the year. Business mortgage rates will be lower than residential mortgage rates because commercial banks will remain flooded by cash and have nobody to loan it to. Home interest rates will creep up as the governing body withdraws impulse from that part of the market in an attempt to moderate housing price growth.
Wall Street funds that acquired large portfolios of repossessed homes will start to liquidate their single family holdings on account of increasing adjustable rate mortgages. (Many Wall Street investment funds purchased homes with short term adjustable rate loans and those loans are either coming due or are having a look at the likelihood of rising rates.) These The Street funds never meant to be permanent landlords (and they aren't very good at it). With home costs up this is a very good time for these funds to start cleaning up their portfolios by liquidating their most troublesome and most price inflated properties. The release of this inventory will put a downward price pressure in those markets who had the highest rates of appreciation from the trough. I might be particularly cautious about creating a position in Las Vegas, Phoenix, San Francisco Bay and Southern California and if I already had a large profit tied to a property in one of those markets I'd consider exchanging out of it.
I remain a massive fan of the Dallas-Fort Worth metro. I do have a personal bias for letting you know about that market as we are building and selling rental homes in Dallas and Fort Worth, but there are many other smart folks who are awfully bullish on Texas. Visit our website for a great video by the North Texas Business Commission why the DFW economy is at the beginning of a long-term upwardly trending market.
I am also attracted by Charlotte, Denver, Atlanta, Miami, Tampa, Washington DC metro, Portland, and Seattle but not nearly so much as I like Texas. I foretell all the major cities and tiny oil towns in Texas will have 6-10% housing price and rent increases with lower rates of vacancy (6.5% vacancy or less).
Bitcoin will get more media interest, but its pricing will become far more uncertain such that only the black market economy will actually. Accept it for payment. Executives around the globe will find how to tax bitcoin.
Stock prices will become highly unsteady in 2014. Watch for heart wrenching price swings of 10-15% up and down in a stated month. Stock traders will make record profits in 2014. Stock speculators will end the year sideways or down.
The rate of unemployment is far worse than the published numbers because many people who have expired off of unemployment benefits and have stopped trying to find work, or they have moved onto the rolls of Federal disability. States pay for unemployment benefits but the Fed pays for disability so money strapped states are moving folk off unemployment benefits and onto Fed. disability benefits as a way of balancing their budgets. Those on incapacity are not counted as jobless.
Expect to see a unwaged industrial recovery. The gap between the affluent and the poor will expand as the affluent earn money by owning assets which are rising in price while the poor earn cash selling their time but there'll be fewer and less roles for amateur workers because of increased environmental protection legislation and higher minimum wage laws. "The easiest way to help the poor is to not be one of them. " â€"Laing Hancock
2014 will be a wealthy year for many. Be careful not to sucked into hopeful investments because fiat currency will be causing mal-investment everywhere. When you are looking for a fast read on how fiat currency manipulation leads to bad decision-making I strongly recommend reading "The Clipper Ship Methodology" and "Whatever Happened to Penny Candy" by Richard Maybury.
A guru of mine once said, "There is not any such thing as a bad economy" You can only ever be skilled or unskilled in your interplay with the economy.
[Editor's Note: Be certain to see our new Better Business Bureau Review].
About the Author:
Marco Santarelli is an investor, writer and creator of Norada Real Estate Investments â€" a nationwide real estate investment firm providing turnkey investment property in expansion markets around the United States. For more articles like 2014 Industrial Forecasts For Investors In Property, please visit our Real Estate Investing Blog where it was originally published.
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