A Pall of Uncertainty Hangs Over the Economy Health Care Reform Impact on labor market Dodd-Frank Financial Regulatory Reform Impact on credit flows Fiscal Cliff Tax cuts Sequester Euro
U.S. Forecast A recent paper has created an index that quantifies economic policy uncertainty and analyzes its economic impact: Measuring Economic Policy Uncertainty By Scott R. Baker Nicholas Bloom, and Steven J. Davis
U.S. Forecast The index has three components: 1.Newspaper coverage of policy- related economic uncertainty. 2.Number of federal tax code provisions set to expire in future years 3.Disagreement among economic forecasters (Survey of Professional Forecasters)
U.S. Forecast The economic impact of economic policy uncertainty The results of the statistical analysis in the paper show that higher policy uncertainty causes: 1.Lower private investment 2.Lower industrial production 3.Much lower employment
A Slippery Subject What is the Fate of the Euro? Bailouts, haircuts, ECB bond purchases Ongoing concerns (CPIIGS?) Euro still facing greatest threat since inception Two possible outcomes for the Euro zone in the long run. Does the political will to implement the necessary changes exist in Europe?
The Euro and the Tacoma Narrows Bridge A Slippery Subject
Florida’s Housing Market Housing market finally showing signs of life Has housing market found a solid bottom for prices? Distressed vs. Traditional Investor role in distressed market Housing finance problematic
May 2013May 2012 Percent change Closed Sales22,37518,88418.7% Median Sale Price $171,000$147,50015.9% Median Days on Market 5565-15.4% Inventory ( Months Supply ) 5.07.5-32.7% Florida Housing Market
Closed Sales Percent change Year ago Median Sales Price Percent change Year ago Traditional15,76834.8%$205,90011.9% Foreclosure/REO3,342-2.6%$100,0009.7% Short Sale3,265-13.1%$125,30011.9% Florida Housing Market Distressed Market Share of Total Market Declining
Florida Housing Market Housing market recovery continues to unfold Prices have gained traction Can the momentum be maintained? The growing investor role Housing finance still problematic
Florida Housing Market Investors are back in Florida residential real estate Evidenced by high share of cash transactions Private equity & hedge funds Is this a good thing or a bad thing?
Florida Housing Market Housing Finance Unsustainably high share of cash transactions Mortgage availability has been restricted by Dodd Frank Capital Standards Underwriting Standards Limited Private Securitization Demise of Mortgage Brokering Shell shock Is this a good thing or a bad thing?
Florida Forecast In 2010 the economic recovery began Real GSP growth 1.4% that year In 2011 the economy limped further along 1.3% Real GSP growth In 2012 we expect 1.6% growth Job growth has limped alongside but only starting late in 2010.
Florida Forecast Economic and job growth doesn’t gain significant altitude until 2014 and 2015 Real GSP growth: 2014 = 3.3% 2015 = 4.0%
2013-2016 Averages; Q2 2013 Forecast Florida Sector % Average Annual Growth Construction7.3 Professional & Business Services 4.0 Trade, Transportation & Utilities 3.2 Education-Health Services2.2 Leisure & Hospitality2.0 Information1.1 Manufacturing0.9 Financial0.7 State & Local Government0.3 Federal Government
Existing Single-family May 2013May 2012 Percent change Closed Sales7316699.3% Median Sale Price $189,950$163,44516.2% Median Days on Market 4450-12.0% Inventory ( Months Supply ) 4.45.8-25.1% Sarasota Housing Market