Is The Recession Really In The Rearview Mirror? We Think So.

Around this time of year most of us take time to reflect on the past year, while looking forward to the new one.  The same is true for us at Patrick Stewart Properties.  So we did a little research about our economy and real estate.  And we though we would share.

In 2012 the economy experienced some “significant” positive gains in crucial areas.  Indicating that the recession is quite possibly in the “rear-view mirror”.  While economists will not state the U.S. is in full economic recovery, as of November 2012, there were positive gains in almost every area – and substantial growth in the housing market.  Key indicators include:

• GDP grew 2.1% (2.7% in third quarter)
• Consumer confidence grew from 55.2 to 73.7 when comparing year over year
• Unemployment, while still high is nowhere near the 10% figure reached a couple of years ago. In fact it is at 7.9% while most predicted it to be 8.5%
• Jobs are consistently being added in the workplace.  Job growth is averaging 150,000 new jobs per year. And there have been 500,000 new jobs added in the past three months.
• Inflation has eased, and according to the Kiplinger report they expect 2% inflation next year.
• Business spending has been rocky at best, but economists are predicting 4% growth later in 2013.
• Single-family permits are growing the fastest they have since 2008.
• Foreclosures, pending foreclosures and distressed inventory are down across the country

Each of these gains, as predicted, was very small.  Some economic indicators, such as housing and employment figures surprised analysts. Sustained economic growth and recovery is extremely risky.  Most research indicates that companies and individuals are holding off on moving forward because of the pending national debt crisis – the fiscal cliff.  And the economic uncertainty in Europe and instability in the Middle East continues to slow growth. These three factors alone have slowed what could be a full recovery.  Most analysts are predicting more robust growth in the second half of 2013, with 2014 and 2015 achieving significant gains.

Let’s hope that our government figures out the fiscal cliff!  2013 will be a great year for Palm Springs real estate, whether you are a first time buyer, or interested in estate-sized homes.