Tuesday
August 19, 2014

Caffeinated Coffee Break for Commercial

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Caffeinated Coffee Break for Commercial

With Texas charm and economic projections abounding, Dr. Mark Doutzer shared his financial outlook for commercial real estate professionals at the NAR Commercial Caffeinated Breakfast on Saturday, Nov. 10. Optimism was the key word of the morning, and Doutzer repeatedly emphasized that the housing market is stabilizing and the veil of gloom is starting to lift. "It's time to re-think housing," he explained, conceding that no one should expect 2007 housing levels to return anytime soon. "That was a social experiment that failed miserably," Doutzer described. "It was a figment of our imagination and should have never happened." While cleaning up the mess has proven an "ugly" task, he said, housing numbers are about 10 percent better than last year, and Doutzer projects they'll be 10 percent better in the year to come.

One of Doutzer's major caveats to economic recovery is having a balanced budget. In order to overcome the current deficit, the economist argued for major changes in federal spending that are not reflected in the 2013 fiscal plan. "We're going to need to share sacrifice," he said, which would involve dramatically scaling back on several government-funded programs like welfare, social security, and health insurance. "But the American people aren't ready for it." Yet even with debt climbing, Doutzer remains confident about an economy on the rise.

In part, his economic encouragement springs from a reduction of debt among American households. As consumer confidence improves and cash reappears in their pockets, more Americans are able to spend on the things they want, creating an effective demand for products, goods, and services. "The fact is, they've got money and want to buy stuff," he said, good news for the commercial real estate professionals in the room. "Because here's something you won't find in the textbooks: If you can't pay for something, you can't pay for something."

-- Melissa Kandel, REALTOR® Magazine