My prophecy for 2014 is fast. "More Fed. stimulus ahead causing mal-investment in localized asset bubbles". I'll say that again but in English this time: People do stupid things with easy money and there's a lot of easy money floating around. Hence when you get some of this quick money don't be stupid with it!
The present level of wealth in the US is being fueled by the "wealth effect" which is fueled by huge central authority impulse holding up asset costs (mostly the stock market and to a much smaller degree the home market as well). The wealth feels real from the standpoint that people are spending money again. However , this is a game of musical chairs and you won't wish to be the last one standing.
Business impulse through the printing press is like using a drug that causes you to feel great till the buzz wears off; then you've an industrial hang-over worse than your original problem. I believe we are at the end of the commercial hang-over created by the last boom to bust cycle and we are just ramping up the happy feeling of the prevailing QE (i.e. Cash printing) infinity inflationary cycle.
These are my categorical predictions about what is coming in 2014. Few people are bold enough to make specific predictions because the more specific you are the simpler it is to be wrong (and most folks hate being wrong). Take these predictions with a grain 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 actually want to hear your feedback.
2014 Business Forecasts for Property Investors
Property leases, salary, food, rates and energy costs will rise moderately in 2014.
Gold will trade between $1150 - $1450 and silver will trade $18.50 - $23.00.
I predict 30-year owner occupied mortgage IRs to go up to 5 p.c by July and hover in the low fives through the end 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 loan 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 large portfolios of repossessed homes will begin to liquidate their single family holdings because of accelerating variable rate mortgages. (Many Wall Street investment funds purchased houses with short term variable rate loans and those loans are either coming due or are taking a look at the chance of rising IRs.) These The Street funds never planned to be permanent owners (and they aren't superb at it). With home prices up this is a very good time for these funds to start cleaning up their portfolios by liquidating their most worrying 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 very cautious about taking 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 mad about the Dallas-Fort Worth metro. I do have a private 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 extremely 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 start of a long-term upwardly trending market.
Also I am attracted by Charlotte, Denver, Atlanta, Miami, Tampa, Washington DC metro, Portland, and Seattle but not nearly as much as I like Texas. I envision all of the major cities and small oil cities in Texas will have 6-10% housing price and rent increases along 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 really. Accept it for payment. Governments around the world will find some way to tax bitcoin.
Stock costs will become extremely unsteady in 2014. Watch for heart wrenching price swings of 10-15% up and down in a given month. Traders will make record profits in 2014. Stock investors will end the year sideways or down.
The rate of unemployment is far worse than the published numbers because many individuals who've expired off of unemployment benefits and have stopped attempting to find work, or they have moved onto the rolls of Fed. incapacity. States pay for unemployment benefits but the Fed pays for disability so money strapped states are moving folks off unemployment benefits and onto Fed. incapacity benefits as a way of balancing their budgets. Those on incapacity aren't counted as under-employed.
Expect to see a unemployed commercial recovery. The gap between the well-off and the poor will broaden because the affluent earn cash by owning assets which are skyrocketing in price while the poor earn money selling their time but there'll be less and fewer jobs for inexperienced workers 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 prosperous year for most. Watch out not to sucked into hopeful investments because fiat currency will be causing mal-investment everywhere. If you are looking for a fast read on how fiat currency manipulation leads to bad decision-making I strongly recommend reading "The Clipper Ship Method" and "Whatever Occurred to Penny Candy" by Richard Maybury.
A mentor of mine once related, "There is not any such thing as a good or bad economy" You can only ever be talented or inexperienced in your interaction with the economy.
[Editor's Note: Be certain to see our new Better Business Bureau Review].
The present level of wealth in the US is being fueled by the "wealth effect" which is fueled by huge central authority impulse holding up asset costs (mostly the stock market and to a much smaller degree the home market as well). The wealth feels real from the standpoint that people are spending money again. However , this is a game of musical chairs and you won't wish to be the last one standing.
Business impulse through the printing press is like using a drug that causes you to feel great till the buzz wears off; then you've an industrial hang-over worse than your original problem. I believe we are at the end of the commercial hang-over created by the last boom to bust cycle and we are just ramping up the happy feeling of the prevailing QE (i.e. Cash printing) infinity inflationary cycle.
These are my categorical predictions about what is coming in 2014. Few people are bold enough to make specific predictions because the more specific you are the simpler it is to be wrong (and most folks hate being wrong). Take these predictions with a grain 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 actually want to hear your feedback.
2014 Business Forecasts for Property Investors
Property leases, salary, food, rates and energy costs will rise moderately in 2014.
Gold will trade between $1150 - $1450 and silver will trade $18.50 - $23.00.
I predict 30-year owner occupied mortgage IRs to go up to 5 p.c by July and hover in the low fives through the end 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 loan 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 large portfolios of repossessed homes will begin to liquidate their single family holdings because of accelerating variable rate mortgages. (Many Wall Street investment funds purchased houses with short term variable rate loans and those loans are either coming due or are taking a look at the chance of rising IRs.) These The Street funds never planned to be permanent owners (and they aren't superb at it). With home prices up this is a very good time for these funds to start cleaning up their portfolios by liquidating their most worrying 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 very cautious about taking 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 mad about the Dallas-Fort Worth metro. I do have a private 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 extremely 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 start of a long-term upwardly trending market.
Also I am attracted by Charlotte, Denver, Atlanta, Miami, Tampa, Washington DC metro, Portland, and Seattle but not nearly as much as I like Texas. I envision all of the major cities and small oil cities in Texas will have 6-10% housing price and rent increases along 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 really. Accept it for payment. Governments around the world will find some way to tax bitcoin.
Stock costs will become extremely unsteady in 2014. Watch for heart wrenching price swings of 10-15% up and down in a given month. Traders will make record profits in 2014. Stock investors will end the year sideways or down.
The rate of unemployment is far worse than the published numbers because many individuals who've expired off of unemployment benefits and have stopped attempting to find work, or they have moved onto the rolls of Fed. incapacity. States pay for unemployment benefits but the Fed pays for disability so money strapped states are moving folks off unemployment benefits and onto Fed. incapacity benefits as a way of balancing their budgets. Those on incapacity aren't counted as under-employed.
Expect to see a unemployed commercial recovery. The gap between the well-off and the poor will broaden because the affluent earn cash by owning assets which are skyrocketing in price while the poor earn money selling their time but there'll be less and fewer jobs for inexperienced workers 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 prosperous year for most. Watch out not to sucked into hopeful investments because fiat currency will be causing mal-investment everywhere. If you are looking for a fast read on how fiat currency manipulation leads to bad decision-making I strongly recommend reading "The Clipper Ship Method" and "Whatever Occurred to Penny Candy" by Richard Maybury.
A mentor of mine once related, "There is not any such thing as a good or bad economy" You can only ever be talented or inexperienced in your interaction 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 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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