My prophecy for 2014 is fast. "More Federal stimulus ahead causing mal-investment in localized asset bubbles". I'll say that again but in English this time: People do stupid things with fast money and there's a lot of quick cash bobbing around. Hence when you get some of this easy cash don't be dumb with it!
The present level of wealth in the USA is being powered by the "wealth effect" which is powered by large government stimulus holding up asset costs (often the stock market and to a much lesser degree the housing market as well). The prosperity feels real from the standpoint that folks are spending money again. Nonetheless this is a game of musical chairs and you won't need to be the last one standing.
Economic stimulus through the printing press is like using a drug that makes you feel great until the buzz wears off; then you have got an economic hang-over worse than your original problem. I believe we are at the end of the commercial hang-over made by the last boom to bust cycle and we are just ramping up the happy sense of the prevailing QE (i.e. Money printing) infinity inflationary cycle.
These are my categorical forecasts about what's coming in 2014. Few folk are bold enough to make categorical forecasts because the more categorical you are the simpler it is to be wrong (and most people hate being wrong). Take these predictions with a hint of suspicion. Forward this to your mates and use it as a conversation starter. You can use the dialogue to make up your own predictions for the year. I actually want to hear your feedback.
2014 Economic Forecasts for Investors In Property
Real-estate hires, salary, 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 rates to go up to five p.c by July and hover in the low 5s through the close of the year. Business mortgage rates will be lower than home mortgage rates because commercial banks will remain flooded by money and have no one to lend it to. Home rates will creep up as the governing body withdraws impulse from that part of the market to try to moderate housing price expansion.
Wall Street funds that acquired sizeable portfolios of repossessed homes will begin to liquidate their single family holdings because of accelerating adjustable rate mortgages. (Many Wall Street investment funds acquired homes with short term adjustable rate loans and those loans are either coming due or are looking at the chance of rising rates.) These Wall Street funds never meant to be permanent owners (and they aren't very good at it). With home costs up this is a good time for these funds to start cleaning up their portfolios by liquidating their most irksome 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 would be particularly cautious about creating a position in Vegas, Phoenix, San Francisco Bay and Southern California and if I already had a sizable profit tied to a property in one of those markets I would 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 a lot of other really smart folks who are awfully bullish on Texas. Visit our website for a great video by the North Texas Economic Commission why the DFW economy is at the beginning of a long term upwardly trending market.
Also I am drawn by Charlotte, Denver, Atlanta, Miami, Tampa, Washington DC metro, Portland, and Seattle but not nearly as much as I like Texas. I foretell all of the major towns and tiny oil cities in Texas will have 6-10% housing price and rent increases together with lower rates of vacancy (6.5% vacancy or less).
Bitcoin will get more media attention, but its pricing will become far more volatile such that only the black market economy will truly. Accept it for payment. Executives around the world will find a way to tax bitcoin.
Stock costs will become highly unsteady in 2014. Watch for heart wrenching price swings of 10-15% up and back down in a stated month. Traders will make record profits in 2014. Stock investors will end the year sideways or down.
The jobless rate is far worse than the printed numbers because many people who've expired off of unemployment benefits and have stopped looking for work, or they have moved onto the rolls of Fed. disability. States pay for unemployment benefits but the Fed pays for disability so cash strapped states are moving folks off unemployment benefits and onto Fed. disability benefits as a method of balancing their budgets. Those on disability are not counted as unemployed.
Expect to see a unemployed economic recovery. The space between the well-off and the poor will broaden as the wealthy earn money by owning assets which are skyrocketing in price while the poor earn money selling their time but there'll be fewer and less roles for amateur employees on account of increased environmental protection legislation and higher minimum wage laws. "The best way to help the poor is to not be one of them. " â€"Laing Hancock
2014 will be a wealthy year for most. Take care not to sucked into speculative investments because fiat currency will be causing mal-investment everywhere. If you happen to be looking for a fast read on how fiat currency manipulation leads to bad decision-making I highly recommend reading "The Clipper Ship Methodology" and "Whatever Happened to Penny Candy" by Richard Maybury.
A mentor of mine once related, "There is not such a thing as a bad or good economy" You can only ever be skilled or amateur in your interaction with the economy.
[Editor's Note: Be sure to see our new Better Business Bureau Review].
The present level of wealth in the USA is being powered by the "wealth effect" which is powered by large government stimulus holding up asset costs (often the stock market and to a much lesser degree the housing market as well). The prosperity feels real from the standpoint that folks are spending money again. Nonetheless this is a game of musical chairs and you won't need to be the last one standing.
Economic stimulus through the printing press is like using a drug that makes you feel great until the buzz wears off; then you have got an economic hang-over worse than your original problem. I believe we are at the end of the commercial hang-over made by the last boom to bust cycle and we are just ramping up the happy sense of the prevailing QE (i.e. Money printing) infinity inflationary cycle.
These are my categorical forecasts about what's coming in 2014. Few folk are bold enough to make categorical forecasts because the more categorical you are the simpler it is to be wrong (and most people hate being wrong). Take these predictions with a hint of suspicion. Forward this to your mates and use it as a conversation starter. You can use the dialogue to make up your own predictions for the year. I actually want to hear your feedback.
2014 Economic Forecasts for Investors In Property
Real-estate hires, salary, 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 rates to go up to five p.c by July and hover in the low 5s through the close of the year. Business mortgage rates will be lower than home mortgage rates because commercial banks will remain flooded by money and have no one to lend it to. Home rates will creep up as the governing body withdraws impulse from that part of the market to try to moderate housing price expansion.
Wall Street funds that acquired sizeable portfolios of repossessed homes will begin to liquidate their single family holdings because of accelerating adjustable rate mortgages. (Many Wall Street investment funds acquired homes with short term adjustable rate loans and those loans are either coming due or are looking at the chance of rising rates.) These Wall Street funds never meant to be permanent owners (and they aren't very good at it). With home costs up this is a good time for these funds to start cleaning up their portfolios by liquidating their most irksome 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 would be particularly cautious about creating a position in Vegas, Phoenix, San Francisco Bay and Southern California and if I already had a sizable profit tied to a property in one of those markets I would 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 a lot of other really smart folks who are awfully bullish on Texas. Visit our website for a great video by the North Texas Economic Commission why the DFW economy is at the beginning of a long term upwardly trending market.
Also I am drawn by Charlotte, Denver, Atlanta, Miami, Tampa, Washington DC metro, Portland, and Seattle but not nearly as much as I like Texas. I foretell all of the major towns and tiny oil cities in Texas will have 6-10% housing price and rent increases together with lower rates of vacancy (6.5% vacancy or less).
Bitcoin will get more media attention, but its pricing will become far more volatile such that only the black market economy will truly. Accept it for payment. Executives around the world will find a way to tax bitcoin.
Stock costs will become highly unsteady in 2014. Watch for heart wrenching price swings of 10-15% up and back down in a stated month. Traders will make record profits in 2014. Stock investors will end the year sideways or down.
The jobless rate is far worse than the printed numbers because many people who've expired off of unemployment benefits and have stopped looking for work, or they have moved onto the rolls of Fed. disability. States pay for unemployment benefits but the Fed pays for disability so cash strapped states are moving folks off unemployment benefits and onto Fed. disability benefits as a method of balancing their budgets. Those on disability are not counted as unemployed.
Expect to see a unemployed economic recovery. The space between the well-off and the poor will broaden as the wealthy earn money by owning assets which are skyrocketing in price while the poor earn money selling their time but there'll be fewer and less roles for amateur employees on account of increased environmental protection legislation and higher minimum wage laws. "The best way to help the poor is to not be one of them. " â€"Laing Hancock
2014 will be a wealthy year for most. Take care not to sucked into speculative investments because fiat currency will be causing mal-investment everywhere. If you happen to be looking for a fast read on how fiat currency manipulation leads to bad decision-making I highly recommend reading "The Clipper Ship Methodology" and "Whatever Happened to Penny Candy" by Richard Maybury.
A mentor of mine once related, "There is not such a thing as a bad or good economy" You can only ever be skilled or amateur in your interaction with the economy.
[Editor's Note: Be sure to see our new Better Business Bureau Review].
About the Author:
Marco Santarelli is an investor, writer and founder of Norada Real-estate Investments â€" countrywide property investment firm providing turnkey investment property in expansion markets around the US. For more articles like 2014 Economic Forecasts For Investors In Property, feel free to visit our Real-estate Investing Blog where it was originally published.
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