Today’s REI Classroom Lesson
From the hospitality and leisure market to the fact that it’s an election year, Steve Rozenberg talks to us about factors we can look at to predict the strength of the housing market for 2016.
REI Classroom Summary
When you look at the statistics and trends from 2015, it’s looking optimistic for the housing trend over the next year, as Steve elaborates on.
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Steve: Hi, everybody. This is Steve Rosenberg. I am the co-founder of Empire Industries Property Management company. We are located in Houston, Texas. We manage roughly about 500 properties all across the Houston area. Today, what we’re going to talk about is a lot of people are curious about the economy in 2016 nationally, and what our opinions are, and what we think is going to happen.
Mike: This REI Classroom real estate lesson is sponsored by UglyOpportunities.com.
Steve: We have some good data. My opinion is is the information that people find out, the factual numbers can tell you a story, how you derive that information and what your perception of those numbers are, probably has to do with your experience level and things that you have done in the past that may reflect what you’re thinking.
One of the first indicators I would say is you want to look at the hospitality and leisure market. That is normally, the indicator of the economy. Last year, the hospitality and leisure market was up 2.92% over 12 months. That is a good indicator that things are still trending in a growing condition, because if people were out shopping and they’re vacationing and they’re going to hotels, that means that they’re going to keep spending money. They’re not going to fall off of a cliff.
In the U.S. last year, the U.S. jobs were up 1.88%. That was 2.65 million jobs in 2015. That is expected to continue. Obviously, that type of job could change, depending on the economy, depending on oil, depending on a lot of things. But the good thing is that the jobs are going to keep trending in the right direction.
Right now, there are more jobs ever in history. Despite what some people may think, there actually are a lot of jobs, and anybody can get a job, if they really wanted one. The nice thing is if people want to work, they can work, and that’s what’s going to keep driving the economy.
The U.S. household income, which is very interesting, that was up 0.93%. The average income for households in the U.S. was about $53,000 in 2015. The median home price was $206,000. Like I said, that went up 0.93%, and you want that to go up slowly. You don’t want to see these big spikes, like you saw in 2007, 2004, 2005, because that means it’s unobtainable.
Some of the things that you want to consider for 2016, I wouldn’t say go gung-ho, you want to look at some things, meaning it’s an election year. That obviously is going to have some people rolling back just a little bit, and being a little conservative, to see which party will be elected.
Because of that, there’s going to be Government Subsidized Enterprise or GSE. Those are Fannie Mae, Freddie Mac, and the future of a lot of those programs will depend largely on who’s elected. You may want to buy houses now, or not want to buy houses now, depending on what you think and what your perception is of the party that may take over the White House, could do good or bad, as far as the GSEs.
I think you’re going to see a lot more government regulations, as far as governing people. I think my opinion is if you’re going to buy, this will be the time to start doing your homework and start looking at in finding deals, because the deals are there, I think it just depends on your perception and what you consider a deal. Again, this is Steve Rosenberg with Empire Industries. Thank you very much.
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