If anyone were to say that 2008 started with a bang, they'd probably be referring to the sound of our stock market dropping like an anvil on the 1st. Woo hoo. However, the rationale behind the drop is not what the recessionistas of the world want to hear. Fundamentals backing our economy are strong. The upcoming general slowdown will force inflation back into check. Many ask when the loss of wealth from the housing slump and high gas prices will affect the consumer on an [...]
Seller's expectations are still too high when it comes to price. How do I know? Look at our Zip Code of the Week (below). November to December 2007: 163 Orlando condos listed - 6 sold = 157 unhappy sellers. True, there may be several reasons for the lack of sales - one of which is that buyers can be incredibly slow to catch on, and also the fact that it's harder to get a loan these days - but in most cases, the seller is still hoping, against hope, to get what they [...]
Arguably the father of modern economics, Adam Smith was a proponent of a Laissez-Faire style of economics. Translation: government does as little as possible and the natural laws of supply and demand will determine price levels and purge the market of any impurities. Very much a "might makes right" kind of approach. Admittedly, there are certain functions that government must perform in a regulatory capacity to keep the playing field level, but things seem to have gotten out of [...]
Fact:Â China needs our discretionary income and consumer sentiment to stay high so they can maintain export levels and sustain the bullish run they've had in GDP. Â Fact:Â If we go down, we are chained to so many other economies that we will bring the world kicking and screaming with us. Â Opinion:Â The Federal Reserve has shown a pronounced recency effect, where they basically only remember what happened RIGHT BEFORE they make any major decisions. Â I know Fed Chairman [...]
At 9:10 on Wednesday, November 14th Fed chairman Ben Bernanke gave a rousing speech at the CATO Institute concerning transparency of monetary policy and future Fed movement. Since it took about an hour to say, I'll do my best to hit you with the highlights. Ben reiterated that he practices a method of policy orchestration called Inflation Targeting, then promptly conceded that a single-minded focus on the economy is ill-equipped to handle the dual mandate of the Federal Reserve (to maintain [...]
A recent forecast report released by the National Association of Home Builders projects that Florida state, and in particular metro areas within the state, will experience the steepest declines in housing starts this year compared to last year. Housing starts in Florida are projected to fall from 198,900 in 2006 to 103,300 this year, a massive 48.1 percent drop, the builders group reported. Florida is home to nine of ten U.S. metro areas with the sharpest projected drop in housing [...]
I was a kid the last time the dollar was this weak against the Great British pound, but right now for every pound a Brit brings to Orlando, they get over two dollars ($2.09) in return, effectively doubling their money - and more than doubling it when you take into account how much more expensive the U.K. is. This makes buying Orlando condos a no brainer. Combine this with the current heavy discounts in the Orlando condo market and you'd have to be a fool not to invest. Our Canadian neighbors [...]
I'd like to start with a less than encouraging quote from Fed chairman Bernanke: "Overall, the Committee expected that the growth of economic activity would slow noticeably in the fourth quarter from its third-quarter rate. Growth was seen as remaining sluggish during the first part of next year, then strengthening as the effects of tighter credit and the housing correction began to wane." Unless the housing correction DOESN'T wane. A frightening thought, but one that must be entertained [...]
Take a gander below at the condo projects that have gone south in the last month or so. It's depressing. Or is it? What else does it signal? (other than an increase in the sales of Head On: Apply Directly To The Forehead). I'm going to stick my neck out here and suggest that this "correction" might just signal the beginning of the end of the condo buyer's market in Orlando. Because the combined value of these monthly flops is many thousands of condos that will [...]
The Cons of Cutting Rates: Dollar’s declining value (if the Fed makes it easier to lend, more money will move in to circulation. A higher money supply decreases the overall value, making imports more expensive and consequently causing inflation.) High Gross Domestic Product (3rd quarter GDP came in today at 3.9%, a hot measure. If we get to producing too much, employment and wage inflation will both flare up, meaning consumers have more spendable capital. When businesses see that [...]
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