Happy New Year! As many of my long term readers remember, I put out the annual Gold Report each year with our forecast of the year ahead. As with many businesses, the internet with big data and instant access has kind of made the annual Gold Report forecast outdated.
However, as 2015 takes off, real estate leaders and experts are publishing their forecasts and expectations for the coming 12 months. So rather than reinvent the wheel, I thought it better to give you a link to two of the better reports to give you a big picture of the real estate market as a whole;
As in my past Gold Reports, after looking at the national market, we look at California. Perhaps one of the best articles to help you understand our “Golden State” is Jobs Move Real Estate (California). If you don’t have time to digest the whole article – California is getting better. Jobs exceed past recession levels but population growth of almost a million keeps us behind the curve still.
Finally, San Diego. Our economy is poised to add 30,000 jobs in 2015. According to USD Economist Alan Gin, the recent plunge in gas prices should add an extra $1 million a month in cash, to place in use in our economy.
The latest index of leading indicators from the University of San Diego shows continued gains by the region’s economy, with prospects for solid growth through 2015. The University’s Burnham-Moores Center for Real Estate reported that the index rose 0.6 percent in October. October’s gain was the fifth consecutive one for the index and “signals continued solid growth in the local economy at least through the end of 2015. Strong gains in initial claims for unemployment insurance and the outlook for the national economy offset a sharp drop in building permits,” the center said in its report. “Consumer confidence and help wanted advertising were up moderately while there was only a slight increase in local stock prices.
To read more about San Diego’s housing and employment, here is a link that I think gives the best charts and insight; San Diego Housing Indicators.
If you want to create your own charts and learn about specific market asking rents, sale prices, market supply and such, I recommend going to our website and clicking on either of the market trend boxes, on the home page, and change the variables to receive the desired info; www.CDCCommercial.com.
Lastly, I thought you might enjoy this outlook on the National Retail market published by CoStar and yes that is yours truly quoted in the article!
I have to tell you, I can’t see how interest rates will stay this low forever. If you have a loan you should evaluate a refi. If you have cash, despite low cap rates, we are in a situation of positive leverage This is where cap rates (rate of return) can be found higher than loan rates. The only warning I have is that in buying, you want something that rents can grow or be increased over time as rates increase (and caps rise). Otherwise your appreciation will be wiped out by rising cap rates.
Since I have given you so much to read and digest this month, I thought I would leave you with an appropriate cartoon instead of a story. .
Don Zech (license #00885909)
CDC Commercial, Inc
Real Estate Services
Email: dzech@cdccommercial.com
