Just wanted to throw my 2 cents in here real quick.
I don’t think 2009 will be a year of recovery. Infact I’m almost certain it will be worse than 2008.
How can I be so sure? Because nothing has changed.
A few quick predictions. ( I’ve always wanted to do this.)
1. Job loss is going to get crazy. I think the government number are a joke. Just check out Shadow Stats.
2. Home prices will fall sharper than they did in 2008.
3. Foreclosures will increase big time. The second wave starts in March and carries on till 2011. Subprime foreclosures were just the tip of the of the iceberg. Check out Mr. Mortgage for details. Take note this video was recorded in April of 2008. Alt-A will be the CNN & Fox News real estate buzz word of 2009. Just like how subprime was their buzz word for 2008.
4. Multitudes of retail stores even brands we’ve grown to love will disappear. Except Walmart who I think will be stronger than ever. I’ve alway thought it was so strange that whenever people go on vacation they spend a bunch of money to go somewhere and shop. Two years ago I went to Florida and I did the exact samething. This will also greatly effect Christmas. I’m pretty sure the retail side of Christmas is done. Hand made gifts like Grandmas sweaters are going to come back big time.
5. Obama will bring us many more bailouts. All of which will have awesome names.
6. The Dow Jones will reach 6,000 by December. After I typed that I thought wow that’s a big drop but hey at this time last year the Dow was at 12,000 its at roughly 9,000 right now. Another 3,000 point drop doesn’t seem that far fetched in my book.
7. The credit markets will not free up. The old days are gone. While this was debatable in 2008 in 2009 it will become a definite. Defaults on all kinds of loans will spike I’m looking at Sallie Mae having a lot of troube in 2009.
8. The auto makers will be back and will need more money. I can totally see these companies being nationalized. I mean what are we going to do, give them money one time then when they need more say no. Come on.
9. The thinning of the real estate herd will continue. All these jobs that have popped up around real estate, including mine, will continue to be at high risk. Resulting in many sleepless nights. As income levels for many of these professionals continues to decline more and more of them will look at getting out of the industry for good. In general I feel like that this is a good thing. I’m big believer in the theory that only the strong will survive. Especially in business. Granted for some people business will be better than ever. I hope I one of those folks.
10. Say goodbye to deflation and hello to inflation. Remember the gas prices last summer? They are on their way back. I have official uncrossed my fingers for $1 gas. This week alone gas has gone up 20 cents in my area. Its at $1.52 right now.
Yet with all these things happening I’m still optimistic.
The rental market is looking real good. I’ve been moving many of my clients into rental properties and away from property flips. At first many at my company were against this move but starting next week we will be scouring the city for the best rentals. I’m very glad to see that other at the company are starting to look at things differently. I’m sure we will continue doing property flips but over the next year our focus will be on rentals.
My only concern in the rental arena is how are my tenants going to pay rent if they don’t have jobs?
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