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Wilderness Realty, Inc.

Maine Land Sales Specialists

Market Notes By Wilderness Realty

March 12, 2013 by  
Filed under Land Economics, Real Estate Blog, Recreation Land

Rosy Picture

It is a Rosy Market.

For quite some time now the US economy has been in the doldrums and consumer confidence has been low.  It was feared that it was moving toward a deflationary period similar to the events in Japan over the past 20 years.  Deflation happens when consumers hold off on major purchases in hopes that prices will continue to decrease.  The effect is a downward spiral.

Here are some economic expectations and news for 2013.

The Japanese yen is down when compared to the US dollar.  This may solve that country’s persistent deflation problem.  Japan is the world’s 3rd largest economy and its recovery from long term economic problems will have a positive impact on the global economy including the US.

Quantitative easing helps avoid deflation by putting money into the system.  This has been the Fed’s strategy for the past several quarters.

Housing inventory should be about 4 months in a healthy economy; it is now at 4.3 months and is not such a drag on the country’s financial system.

The stock market has nearly returned to pre-recession values.  Real estate values are up throughout a good portion of our nation.

Expectations are that the US economy will see increases in all areas throughout 2013.

Consumers who made asset purchases in the past few years are benefiting from healthy profits.  When the value of one’s portfolio goes up one dollar, people have a tendency to spend between 2 and 5 cents on additional investments or large purchases.

It appears that a solid recovery will take place in 2013; falling values for stocks and real estate have already bottomed out and increases are now occurring and expected to continue for the rest of the year.

These notes were taken from a speech by Dr. Marci Rossell on March 11, 2013.