The economy, GDP, oil, loans, real estate values are all tied together. Based on those topics, Carol made several predictions about the next few years:
1-The GDP will be stuck around 2 percent in 2012.
2-The stock market will level off.
3- Oil will stay stable. The people in the Middle East don’t want oil prices to skyrocket because that only negatively effects the economy of the US (for one) so they will continue to keep the black gold flowing.
4- Interest rates will stay low till 2013.
She made a comment that our biggest problem is Europe and the economic woes (Greece, Italy, etc). If Europe sinks then so does the US.
5- Think that the banks are not making enough? She predicts that loan fees will increase by .5 to 3 percent. When that happens wait to see how many seller financed transactions (for those who are not underwater) or all cash offers come about.
For those of you who keep telling yourself “I am going to wait and buy real estate”, what you should tell be saying is “I am going to buy real estate and wait.”
For those investors out there remember that the value is in the land where land is a valuable resource (San Francisco, Peninsula, etc).
Think about the 3 – 4 percent interest rates out there. With rates this low 25 percent of the goes to equity and the rest to interest. That’s where the magic of the numbers lies.
6- Watch for the 2nd market. People will skip the over the banks and use their stock options to buy homes and other real estate.