With a better than expected December jobs report, an improving GDP, a strong dollar, the U.S. economy is on the mend and there is no other place to be but here, in the U.S. This is one of the reasons the country continues to receive interest from many foreign buyers and investors, especially in the Bay Area, which has a "spectacular housing market." This is the message real estate expert Carole Rodoni brought to members of the Silicon Valley Association of REALTORS® this month.
The former president of Alain Pinel Realtors, who now owns Bamboo Consulting Inc., indicated the country ended 2014 with the best jobs growth report in 15 years and an unemployment rate that reached a six-year low. The country added 252,000 jobs in December, better than the expected 245,000. The unemployment rate dropped to 5.6 percent from 5.8 percent in November, the lowest rate since 2008. She expects GDP to hit 3 percent this year.
Compared to the rest of the world, the U.S. economy is doing well, said Rodoni. Europe is hurting with a high unemployment rate, Russia has been hard hit with the drop in oil prices, and other countries, including China, are struggling to keep their economy in check.
"At the end of the day, when you look around the world, there's no place to go," said Rodoni. Whether it be property or stocks, it's going to be U.S.
With interest rates still low, buyers need to get in the market if they can. "It's not only cheap money, it's free money," remarked Rodoni. "The interest rate has as much to do with wealth building as appreciation."
Another reason Rodoni gave for a healthy local housing market outlook is the Bay Area has industries that are not interest rate-sensitive, like technology, energy and health care. Rodoni expects hundreds of companies to go public, more acquisitions by companies like Yahoo, Google and Facebook, and more millionaires again this year.
Demand for homes in Silicon Valley will continue, but she also noted, a downside to the December jobs report is the weak wage growth which is affecting those in the region who are not in the high-paying industries. For this reason, she predicts 2015 will be "the year of the East Bay," where people will flock to because homes there are more affordable.
For Realtors, Rodoni said expect more competition from websites that will try to move real estate online, but they will not be able to replace the REALTOR®, especially in complicated markets like California, "where you have complicated regulations and complicated deals with difficult people."
Rodoni also urged REALTORS® to watch the millennials and cater to them. "It's all about them," she said. They want the location, the lifestyle and the zip code, and the wealthier among them are willing to pay the price. REALTORS® still have to urge their sellers to price realistically because this generation is smart and savvy.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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