Holy Economic Updates, Batman!
Today I had the opportunity to attend the annual Yukon Title Company Economic Update. For the past several years, they have brought up Ted C. Jones, PhD to give an economic forecast to the local real estate industry. Ted is the Chief Economist for Stewart Title Guaranty Company, and always gives a fun and informative presentation. This year was no exception. Here are a few of the points that stuck with me:
The national economic update is looking a little bleak. I knew the national debt was huge, but Ted really put into perspective for me. What especially struck home was the point that the sequestration that's designed to cut government spending is only 2.2% of our total spending. That's barely a drop in the bucket! Likewise, one of the big questions in real estate right now is what will happen with capital gains taxes. Ted's not sure, but the President's recommended 35% is HUGE! And, will certainly have a big impact in the real estate industry.
Locally, however, things are looking a little brighter. In fact, Alaska is the 4th best business friendly state in the country. And, given this statistic, like many of us, Ted agrees that rather than focusing on the amount of the Permanent Fund, our government should focus on job creation. In the Fairbanks area, our prices have remained relatively stable. Ted credits this to the fact that we've purchased homes according to our income, and the low interest rates that we've enjoyed over the past few years have allowed us to purchase at at higher level.
Ted ended his presentation with a quote from the Bible. Proverbs 22:7 - The rich rule over the poor, and the borrower is slave to the lender. This was the second time that I've heard this scripture today. Maybe our government hasn't embraced this concept, but I'm thinking that someone is telling me I ought to! Especially after what I learned today.
To learn more, read his blog Jones on Real Estate at http://blog.stewart.com/.