The recent annual National Association of RealtorsÂ® get-together opened with a grand gathering to hear what some economics heavyweights would say about coming conditions in the country.
You could hear a pin drop through most of it â€“ despite the huge size of the auditorium. Our Rehoboth Beach real estate market is never in total lockstep with the national picture â€“ but it certainly is affected by it. Economists are forced to play a guessing game, but the best are pretty good at it.
Wells Fargoâ€™s senior economist Mark Vintner had good news and bad news. For those who have Rehoboth Beach real estate already in their â€˜ownedâ€™ portfolio, despite the downturn of recent years, he thinks they own one of the few top-notch inflation-proof investments. â€œReal estate and gold,â€ he said. He gave convincing reasons why, despite almost any curves the middle-term future may send, the value of real estate (â€œhousingâ€) should grow even if the economy unexpectedly weakens.
The not-so-good news was Vintnerâ€™s suspicion that the disparity in incomes will continue to widen, partly because rising rents and tough lending conditions make it hard for first-timers to make that first home purchase (of course, thatâ€™s good news for investors who own the rentals).
Of equal interest was NARâ€™s Chief Economist Lawrence Yunâ€™s rapid-fire delivery of real estate stats and forecasts. He thinks mortgage interest rates will stay at their current historic lows for a while longer, but perhaps not so long as the Federal Reserve has been indicating. Longer term, Dr. Yun expects interest rates to rise gradually, but hold at the historically normal 5%-6% range. There were visible signs of relief as he went through the slide show of charts and graphs which illustrated why a return to double-digit inflation is unlikely.
The only moment of anything like humor came when one of the experts was asked about the global economy, and what will happen if no action is taken. â€œEurope has â€˜kicked the canâ€™ down the road until there is no road left,â€ he said, â€œand no can, either.â€
Then he paused thoughtfully before adding, â€œBut theyâ€™re still kicking.â€