My prophecy for 2014 is short and sweet. "More Fed. impulse ahead causing mal-investment in local asset bubbles". I will say that again but in English this time: Folk do dumb things with easy money and there is a lot of easy money bobbing around. So , when you get some of this easy cash don't be foolish with it!
The existing level of prosperity in the States is being fueled by the "wealth effect" which is fueled by huge government stimulus propping up asset costs (usually the stock market and to a much lesser degree the housing market as well). The wealth feels real from the viewpoint that folk are spending money again. However , this is a game of musical chairs and you won't want to be the last one standing.
Commercial stimulus through the printing press is like using a drug that makes you feel great till the buzz wears off; then you have got an economic hang-over worse than your original problem. I suspect we are at the end of the industrial hang-over created by the last bust and boom cycle and we are just ramping up the happy feeling of the existing QE (i.e. Money printing) infinity inflationary cycle.
These are my explicit predictions about what's coming in 2014. Only a few people are bold enough to make categorical predictions because the more categorical you're the easier it is to be wrong (and the majority hate being wrong). Take these forecasts with a pinch of salt. Forward this to your mates and use it as a conversation starter. You need to use the dialogue to make up your own forecasts for the year. I really wish to hear your feedback.
2014 Business Forecasts for Investors In Property
Real-estate hires, salary, food, interest rates and energy prices will rise tolerably in 2014.
Gold will trade between $1150 - $1450 and silver will trade $18.50 - $23.00.
I predict 30-year owner occupied mortgage rates to go up to five % by July and hover in the low fives through the close of the year. Commercial loan rates will be lower than home mortgage rates because commercial banks will remain flooded by money and have no one to lend it to. Residential interest rates will creep up as the governing body withdraws stimulus from that part of the market in an effort to moderate housing price expansion.
Wall Street funds that bought big portfolios of foreclosed homes will begin to liquidate their single family holdings as a result of increasing variable rate mortgages. (Many Wall Street investment funds bought homes with short term variable rate loans and those loans are either coming due or are taking a look at the likelihood of rising IRs.) These The Street funds never intended to be permanent landlords (and they aren't very good at it). With home prices 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 releasing 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 Las 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 might consider exchanging out of it.
I remain a huge fan of the Dallas-Fort Worth metro. I do have a personal bias for telling you about that market as we are building and selling rental houses in Dallas and Fort Worth, but there are many other really smart people who are very bullish on Texas. Visit our website for a great video by the North Texas Economic Commission why the DFW economy is at the very start 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 quite so much as I like Texas. I foretell all the major towns and small oil cities in Texas will have 6-10% housing price and hire increases together with lower rates of vacancy (6.5% vacancy or less).
Bitcoin will get more media interest, but its pricing will become even more changeable such that only the black market economy will really. Accept it for payment. Governments around the planet will find some way to tax bitcoin.
Stock costs will become highly volatile 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 speculators will end the year sideways or down.
The jobless rate is far worse than the published numbers because many individuals who've expired off unemployment benefits and have stopped looking for work, or they have moved onto the rolls of Federal incapacity. States pay for unemployment benefits but the Fed pays for incapacity so cash strapped states are moving people off unemployment benefits and onto Fed. disability benefits as a means of balancing their budgets. Those on disability are not counted as under-employed.
Expect to see a unwaged economic recovery. The space between the well-off and the poor will widen as the well-off make money by owning assets which are inflating in price while the poor make money selling their time but there will be less and less jobs for amateur employees because of increased environmental protection legislation and higher minimum wage laws. "The simplest way to help the poor is to not be one of them. " â€"Laing Hancock
2014 will be a prosperous year for many. Be careful not to sucked into hopeful 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 seriously recommend reading "The Clipper Ship Method" and "Whatever Occurred to Penny Candy" by Richard Maybury.
A guru of mine once said, "There is no such thing as a bad economy" You can only really be talented or unskilled in your interaction with the economy.
[Editor's Note: Be sure to see our new Better Business Bureau Review].
The existing level of prosperity in the States is being fueled by the "wealth effect" which is fueled by huge government stimulus propping up asset costs (usually the stock market and to a much lesser degree the housing market as well). The wealth feels real from the viewpoint that folk are spending money again. However , this is a game of musical chairs and you won't want to be the last one standing.
Commercial stimulus through the printing press is like using a drug that makes you feel great till the buzz wears off; then you have got an economic hang-over worse than your original problem. I suspect we are at the end of the industrial hang-over created by the last bust and boom cycle and we are just ramping up the happy feeling of the existing QE (i.e. Money printing) infinity inflationary cycle.
These are my explicit predictions about what's coming in 2014. Only a few people are bold enough to make categorical predictions because the more categorical you're the easier it is to be wrong (and the majority hate being wrong). Take these forecasts with a pinch of salt. Forward this to your mates and use it as a conversation starter. You need to use the dialogue to make up your own forecasts for the year. I really wish to hear your feedback.
2014 Business Forecasts for Investors In Property
Real-estate hires, salary, food, interest rates and energy prices will rise tolerably in 2014.
Gold will trade between $1150 - $1450 and silver will trade $18.50 - $23.00.
I predict 30-year owner occupied mortgage rates to go up to five % by July and hover in the low fives through the close of the year. Commercial loan rates will be lower than home mortgage rates because commercial banks will remain flooded by money and have no one to lend it to. Residential interest rates will creep up as the governing body withdraws stimulus from that part of the market in an effort to moderate housing price expansion.
Wall Street funds that bought big portfolios of foreclosed homes will begin to liquidate their single family holdings as a result of increasing variable rate mortgages. (Many Wall Street investment funds bought homes with short term variable rate loans and those loans are either coming due or are taking a look at the likelihood of rising IRs.) These The Street funds never intended to be permanent landlords (and they aren't very good at it). With home prices 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 releasing 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 Las 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 might consider exchanging out of it.
I remain a huge fan of the Dallas-Fort Worth metro. I do have a personal bias for telling you about that market as we are building and selling rental houses in Dallas and Fort Worth, but there are many other really smart people who are very bullish on Texas. Visit our website for a great video by the North Texas Economic Commission why the DFW economy is at the very start 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 quite so much as I like Texas. I foretell all the major towns and small oil cities in Texas will have 6-10% housing price and hire increases together with lower rates of vacancy (6.5% vacancy or less).
Bitcoin will get more media interest, but its pricing will become even more changeable such that only the black market economy will really. Accept it for payment. Governments around the planet will find some way to tax bitcoin.
Stock costs will become highly volatile 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 speculators will end the year sideways or down.
The jobless rate is far worse than the published numbers because many individuals who've expired off unemployment benefits and have stopped looking for work, or they have moved onto the rolls of Federal incapacity. States pay for unemployment benefits but the Fed pays for incapacity so cash strapped states are moving people off unemployment benefits and onto Fed. disability benefits as a means of balancing their budgets. Those on disability are not counted as under-employed.
Expect to see a unwaged economic recovery. The space between the well-off and the poor will widen as the well-off make money by owning assets which are inflating in price while the poor make money selling their time but there will be less and less jobs for amateur employees because of increased environmental protection legislation and higher minimum wage laws. "The simplest way to help the poor is to not be one of them. " â€"Laing Hancock
2014 will be a prosperous year for many. Be careful not to sucked into hopeful 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 seriously recommend reading "The Clipper Ship Method" and "Whatever Occurred to Penny Candy" by Richard Maybury.
A guru of mine once said, "There is no such thing as a bad economy" You can only really be talented or unskilled 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 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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