Marci Rossell, a PHD and former Chief Economist for CNBC, spoke at our 2015 Michael Saunders company wide meeting last week at The Hyatt in downtown Sarasota. Ms. Rossell illustrated how current global economics were relevant to our local real estate market on the Gulf Coast. She explained that “2015 is the year of Normalization” for THREE separate reasons, all of which favor the consumer.
1> LABOR MARKETS. Unemployment has stabilized between 5 and 6%. Over 1.1 long term unemployed returned to work in the last 6 months. We are enjoying unemploment rates consistent with pre-recession years.
2>OIL & ENERGY PRICES have dropped by over 50% in the last 6 months. Not because of a recession. But because we are no longer dependant on OPEC for our supply. These lower oil and gas prices “are here to stay” per Ms. Rossell.
3> MONETARY POLICY. And finally, our monetary policy under Janet Yellen has fundamentally changed. Gone are the years when no one knew what an Alan Greenspan had in store. When you don’t expect something, it shocks the economy. Janet Yellen warned us all well in advance that the Fed would stop quanitative easing in October of 2014, and she did. What happened ? Nothing per Ms. Rossell. Similarily, Yellen has been warning of modest interest rateincreases to begin in late 2015. What will happen then per Ms. Rossell? Nothing. We have already reacted to the news and no shock waves will emerge.
So there you have it. Everything really got started in 2014 but we were too battered with fear stories from around the world…Russia, ISIS, Ebola…to notice. But we have now truly turned the corner and are feeling the policy benefits of Normalization.
If you have any interest in obtaining information on the Sarasota real estate market please call or email me at 941-993-3159. PatrickDoherty @ MichaelSaunders.com