I attended the 2015 Economic Forecast held by the Metropolitan New York chapter of the Appraisal Institute as the guest of William Picoli, MAI. The guest speaker was Mark Zandi, PhD, the Chief Economist of Moody’s Analytics.
Dr. Zandi is one of America’s leading economists. He was optimistic about the 2015 economy. He predicted that 2015 would be a good year, and so would 2016. He predicted that the economy would add another 3,000,000 jobs, which is pretty much the same as in 2014. He stated that the economy will be back in full employment by mid to early 2016.
He added that the U.S. economy is on a roll. Real GDP is expanding at a 3% pace. Personal wealth average is at an all time high and individual debt has been substantially reduced. Further, the plunge in gasoline prices have significantly increased household spending.
Mortgage rates are very low. Projections for one family home sales are good for 2015, which should show an incredible increase. Interesting, the first time buyer is older.
According to Dr. Zandi, households are disposing a smaller amount of their income to pay their debts. He also said that personal debt delinquency is very low. While mortgage delinquency is still a factor, it is falling fast.
In reply to a question from the audience, Dr. Zandi stated that he believed that the stock market would rise in 2015 by 5%; not as much as 2014, but still a decent gain.
Finally, in response to a question about New York City’s real estate market, he said it will continue to be strong in 2015. One of the primary reasons for this is that foreign investors still view New York City real estate as a safe haven. He compared the economic picture in Europe and Japan. He told the story from a recent European trip where he was asked to explain why America’s economy was so robust and theirs was so poor. His response was that “America has good economists.”