Just some thoughts here and I would appreciate yours. I see the economy and the national real estate market bottoming in the next 6-9 months. In Boston, the real estate market continues to be surprisingly resilient. I see a few things that should have long term benefits for our economy and consumer spending.
Real Estate EconomyTo the left is a chart of crude oil prices over the past year. Since July 2008, crude oil has dropped from a historic high of $147.55 to where it settled at today, down another $3.36 to $70.89 a barrel. Consumers will benefit from this drop in many ways, but most noticeably in the reduction in gas prices. Almost every industry is affected by the price of gas, especially airlines, delivery services, and real estate agents!
What about the Euro? After rallying for the past 5 years, the Euro has taken a sharp turn downward against the Dollar. As of today, 1 Euro was equal to $1.3057. That number was at almost $1.60 just 3 months ago. The main reason for this is people realized economic weakness was not limited to the United States. The European economy is struggling also.
These are just two factors, but long term I believe both of these will help the United States substantially. Yes it will hurt exporting because the cost to buy our goods and services will go up, and yes, tourist visits to the United States will decrease.
There are a number of industries and issues I have left out. I could go on endlessly with different arguments, but this post would be even longer than it already is. I still think the US economy is in rough shape, but I see a foundation for a bottom starting to be built. Let me know what you think.