Today was our 2019 Annual Meeting. Michael Saunders' comments:
We are the real estate market leaders in Sarasota, Manatee, and Charlotte counties. For luxury homes, our sales are "off the charts." We have had the highest home sales in Harbor Acres in Sarasota, Lakewood Ranch, Longboat Key, Boca Grande, Manasota, Anna Maria Island.
Real Trends ranks 500 of the largest real estate companies in the US. Michael Saunders & Company is in the top 15 percent for all companies, and in the top 8 percent for independent real estate brokerages.
43 years ago, Michael (it's a girl!) started her own real estate brokerage--a values-based company specializing in waterfront properties. Today, we have the finest reputation in the area, which is something one can't buy or create over night.
Today's market is challenging, especially with media headlines. Marci Rossell, Chief Economist of Leading Real Estate Companies of the World, was a guest speaker. She recommends that Realtors educate our customers since there is a current concern about market slowdowns and another recession. She does not believe we are headed towards a recession. We are in the middle of an economic expansion, and they do not die with old age. Australia has had a 30-year expansion.
This is an excellent time to purchase real estate because of low interest rates and low inflation. This won't last! Last year, interest rates started to rise, which did not affect our local market, but it was a different story in The Hamptons, other parts of the country and the international market. Many countries are sensitive to the US dollar, and here how international currency dropped:
Brazil -16%; South Africa -21%; Turkey -42%; Argentina -51%.
Brexit: We are past the March 31 deadline for Great Britain to leave the European Union (EU). They voted to do this three years ago, but they have not yet come up with a plan. Great Britain believed they could have the benefits of staying in the EU without the costs. Imagine a husband saying he wanted to stay in his marriage with the benefits at no cost! Life does not work that way and neither does the economy. If there is not a deal by October 31, they will be out of the EU. Mrs. Rossell believes the effect may be short-term, not long-term - similar to Y2K. IF PEOPLE PLAN, THAT MINIMIZES THE IMPACT. No doubt, Great Britain is planning for this.
How are consumers doing saving money? Since 1959, average savings rate has been 8.6%. In 2006, it was 0%, but this year, it is 7%. Saving has picked up because people are worried...they are being more careful and they need to be.
Trade War with China. This information is based on economic factors and not political. China requires technology transfer to do business in China, which is in clear violation of the world trade rules. If we close the trade deficit with China by 1/2, does that mean we will buy less? No. Will we buy in America? No. With the current unemployment rate at just above 3% in the US, we don't have the workforce to manufacture our own goods, so we will buy from other countries. And...who will own those industries in other countries? China. When China earns US dollars, they buy US stocks, bonds, and real estate.
More important than imports and tariffs is US debt. Is this enough to cause a recession? It did not a year ago, but we should plan for this.
US monetary policy: During 2008-09 meltdown, the interest rates were down to zero but lowering the rates was not enough to create purchasing power that continued to contract. The Federal Reserve stimulates economic purchasing power in various ways. During the meltdown, they could have forgiven student loans to get money back into the economy. However, they engaged in bond-buying to stimulate the economy. The federal deficit grew from $800 billion to $4.5 trillion. The feds said they would eventually "unwind their holdings," so last year, they started unwinding to the tune of $50 billion each month, and they knew this was uncharted territory. Real estate is feeling it the strongest; so now the feds are saying that their monetary policy will be managed appropriately. What does that mean? Maybe interest rates will stay current and they will stop "unwinding holdings"?
Realtors have the responsibility to educate our consumers and get them away from depending on the media for this information. People don't need an economic update daily or weekly, once a month is fine. For personal finances, an annual checkup is the answer.
So for me, I'm trading my CNN time for an exercise class at the YMCA.
I'm here to help you with your real estate needs in Sarasota, Venice, and Siesta Key.
LInda Holley, Realtor, GRI, 941-914-4914
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