Exclusive Insight into the Bleak American Economic Outlook!
A recent panel discussion held in Atlanta covered the future of U.S. Economic growth and two highly prestigious guests, both economics professors, Martin Feldstein from Harvard University and Joseph Stiglitz from Columbia University, gave a rather cloudy forecast for this year, namely that growth would be stagnant at best. They continued to explain that this was due to the reduction in stimulus from the Fed and the end of the tax incentives for the purchase of homes and autos. In fact, they went so far as to say that the next decade would see very slow growth, nothing like the bounce-back after other recessions.
However, what they fail to mention is that there are other voices who disagree and in fact expect a modest growth, much better than the previous two years in any case. One of these voices belongs to Dan Maki, chief U.S. Economist at Barclay's Capital, whose gross domestic product forecast for 2009 was the most accurate of 60 economists interviewed. Maki predicts an approximate growth of 3.5% as companies begin to gain confidence and turn their business model from pure survival to expansion as the demand for goods and services rises.
"As firms turn to expansion mode rather than survival mode, they will start raising both employment and investment spending in a similar way," Maki says. He also believes that unemployment will drop back to around 9% by year end.
With such conflicting opinions, one wonders who to believe, prestigious University professors or a man on the front line who got it right the first time?
For those at home, any form of economic growth will lead to higher paychecks but also to higher property prices as people see improved conditions and loosen the tight grip on their wallets.
"The vicious cycle of a consumer oriented economy means that the more money people have, the more they will spend. The more money people spend, the more companies will manufacture to provide for them which usually means higher costs. High demand and reduced supply are the ingredients to an increase in prices in all markets, but especially the real estate market. Everyone wants to own a home and with increased faith in the economy, people will feel more comfortable to take out their savings and start buying," said Gregg Camp, of Property in Santa Cruz.
The naysayers who use a difficult mortgage market as a reason for a continued stagnant real estate market forget one thing. Lenders need to make money and they don't make money from savings, especially since our society is not geared towards saving money. Thus, it shouldn't come as a surprise that they will find a way to provide attractive loans and mortgages, making home purchasing even easier which will also contribute to price increases. The more money a family has to pay for a home, the more money they will need to borrow.
This all leads to one conclusion. If you want to buy a property and make a significant return on your investment, the time to do it is now. "The economy is largely driven by the consumers' faith in what is to come. The more positive news they hear, the more they will spend and this is what will drive the economy to a quicker recovery than many expect," says Camp, an experienced Realtor.
One of the hottest property markets before the recession was in Santa Cruz, making it an ideal choice for an investment or a relocation to take advantage of the current opportunities. To gain the maximum return on investment, though, local knowledge and understanding is vital making it complicated for many.
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PropertyinSantaCruz.com, owned by Gregg Camp, has been designed to help newcomers to the Santa Cruz area learn more and find the ideal property. The site features in-depth information on all the neighborhoods as well as maps to help pinpoint exact locations. Featuring photos as well as map searches for all property types, this site makes identifying the most lucrative opportunities quite easy even for the less initiated.
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