Home > Uncategorized > Ted Jones’ Economic and Real Estate Forecast

Ted Jones’ Economic and Real Estate Forecast

On Friday our office had the opportunity to listen to Ted Jones speak.  Ted
is the Chief Economist for Stewart Title nationally and presented his
Economic and Real Estate Forecast to the Valley Board of Realtors.  Below
are a couple interesting points he made.

A Normal Market?!?!
Ted believes 2002 was our last normal market and it may surprise many, he
believes we are again in a normal healthy market.  2002 had 1,095
residential closings.  For the last three years, ’08-’10 the residential
closings have been 1,204, 1,145, and 1,163.

I think Misty has a good analogy as to why people may think the market is slow.   With
several high sales years 2004-2007, a couple of these years record breaking, it’s like we have been speeding down the road at 100mph.  We are now back to driving the 55mph
speed limit and for many that feels really slow. 

Oil Production
Ted voiced strong opinions about Alaska’s need for more oil exploration.  He
cited only 1 exploration well is set to be drilled in Alaska this year.  The
bulk of drilling is now in more oil company friendly states North Dakota (approx 170 oil rigs currently) and Texas.  Alaskans are seeing a 7% decline per year in oil production.  With this decline it is estimated in 4-10 years the pipeline could be shut down. 

Interest Rates Typically Follow Oil Prices
Ted pointed out that typically interest rates follow oil prices.  An
indicator of the truth in this statement would be the raise in rates just
recently with the turmoil in Libya and the rise in oil prices. 

Gold vs. Real Estate
Another great point brought up was if it is better to invest in gold or real
estate…the answer, real estate.  Ted looked at the percent change of these
two categories from Jan 1980 to October 2010. Gold is up 95% and it is the
most expensive it has ever been.  Housing is up 252%.  Adjust for inflation
gold  has seen a loss of 30.2% while housing is up 18.6%. There are also
added benefits of owning a home.  Having a roof over your head is one a
major one, there are tax deductions as well as other benefits.

Spring thaw is not far away and each weekend brings more and more activity to the market.  Allow us to put our proven negotiation skills to work to get you the best deal.

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