Following are some thoughts we are certain will impact the multifamily business in 2011- regardless of the changing tides in politics. When it comes to mass media, “We the People” are often left with limited factual data of stature, less so with respect to multifamily data points that affect our business.
As the saying goes “all politics is local”. So it is with apartment management. While it’s nice to know the national trends, the day-to-day battle is local. Here, it is my intent to note national data points that will influence every local property owner. They are inescapable facts that I leave to your own interpretation.
As I’ve mentioned in this space before, I really like Bloomberg Radio. There’s no better place to obtain a broad-brush of all things economic in terms of opinion, trends and conjecture.
While so much of the media attempts to think for us, Bloomberg (www.bloomberg.com), in my opinion, provides independent thought with a depth of detail allowing an observer to draw their own conclusions. In a single hour, the amount of factual data can be so overwhelming as to leave listeners with a yearning to sip an entire bottle of wine while in deep contemplation. Granted, one must be selective on the hour to obtain this depth of gestalt-level cognitive interruption.
So much for waxing poetic. Each fact presented here impacts our national economy, your local property and the property management business. The facts:
Fact: It’s Wednesday morning, President Obama is…. President. Regardless of your political stripes, this administration has two (or more) years to shape policy.
Fact: QE2 is here (Quantitative Easing by the Federal Reserve). This fact, along with other measures taken by the Fed, will keep interest rates low for the next several quarters- or longer.
Fact: As the money supply expands, Quantitative Easing will dislodge any sense of potential deflation. A increase in the money supply often leads to greater inflationary pressure. Prices rise, if for no other reason, because more dollars are chasing the same amount of goods. An increasing money supply also reduces the value of debt instruments.
Fact: Unemployment will remain high through 2011. Even with a steady increase in job creation, unemployment will remain above eight percent (8%) through next year.
Fact: The U.S. population is growing “concurrent” with housing starts well below a level necessary to keep pace with the rising population. This fact could create a housing shortage as early as 2014. However, unless job growth really kicks in big time, the more likely conclusion is that we will see average household size increase.
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Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel. For more information, visit: http://www.MultifamilyInsight.com