I recently read this article in USA Today (10/15/09) that gave the top indicators of economic heath.
These are the indicators according to HSBC Consumer Survey of 1,000 households.
- 42% stated: People around me get jobs again
- 39% stated: Unemployment rate declines
- 22% stated: Home sales improve
- 16% stated: Retail sales increase
- 15% stated: Fewer empty store fronts.
Nelsonian Theory would state:
- Watch new job growth – there must be jobs to generate income that will allow and support consumer spending.
- Consumer spending leads to the spending cycle that generates consumer confidence and a return to the free flow of money. Nothing works unless people have money and borrowing capacity.
- Watch for the stable return of the commercial mortgage market – The “continual bad news” being emitted by the commercial lending sources is by itself squelching the desire to borrow on a long term basis. If there is a fear of availability of financing, there will be an absolute slow down in construction.
- Frankly, that can be an advantage, if you personally would purchase existing construction. The increase in user demand (tenants) will force a reduction in vacancy factor in the existing supply (apartment units to be rented to the folks that need safe and clean shelter).
- It is a great time to corner good quality property – The competition is sitting on their hands, and sellers will consider reasonable offers.
Bob Nelson, CCIM
(541) 485-8100 bob@1031gur.com
Pacwest Real Estate Investments, LLC
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