Bright economic spots encourage economist
But the residential real estate market continues to be a bright spot both locally and nationally, said Adams, who also is principal at The Adams Group/Summit Economics LLC in Colorado Springs. Adams made her comments in the presentation, "Real World Expectations for Residential Real Estate" on Thursday at the Boulder County Business Report's Boulder Valley Real Estate Conference and Forecast at the Millennium Harvest House hotel in Boulder.
Continued low mortgage interest rates will continue to drive home sales and resales, Adams said. Prices are rising and the supply of homes for sale is tight, she said.
"It really doesn't look too bad for residential real estate here in Boulder," Adams said. "Consumer and business confidence will continue to increase, (and) jobs will continue to grow."
Turning to the national arena, she predicted the federal government will not be able to reduce the deficit quickly, which could create a possible drag on the economy. As consumers and companies pay down debt and save money, she said, the economy does not get stimulated, either.
"We can't have everybody saving at the same time," Adams said. "I believe the government will have to maintain stimulus while businesses continue to deleverage themselves."
No matter how much economists may study the economy, however, they can't fix it, Adams said. She reminded listeners that too many homeowners were using their homes "as ATM machines" when the mortgage market fell apart in 2008. Single-family home construction dropped by more than half in recent years, she said, and the industry still is working its way out of that drop.
Now that the presidential election is over, it appears politicians will work together to avoid a potential impending "fiscal cliff" of the federal budget, Adams said. Gross domestic product numbers are being revised upward, she said, and unemployment figures are down, both indicators that things are getting better.
"I'm more optimistic now," Adams said.
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