Where Do We Stand Now?

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Commentary by Boris Gruzman

RISMEDIA, Nov. 4, 2008-When I was asked to write this article I did not know who would be occupying the White House for the next four years. Since 1960, the DOW Jones hung around 800 points, up until the computer revolution of the 1980’s. From 1982 we have witness relentless rises, and a record high of 14,093 in 2007

During Kennedy’s election campaign, he charged that under Eisenhower and the Republican Party, the United States was falling behind and he, as President, would “get America moving again.”

In his acceptance speech Kennedy stated: “We stand today on the verge of a new frontier- the frontier of the 1960’s, a frontier of unknown opportunities and perils- a frontier of unfulfilled hopes and threats.”

Headlines from the 1960 presidential election are strikingly similar with what we observed during the 2008 presidential campaign. It is “déjà vu.” Our last economic expansion which started in 2001 was fueled by cheap credits. As of February 2008, the national debt equated to $33,000 per capita or $60,100 per head of the U.S. working population.

According to a J.P. Morgan Chase forecast, we will see three quarters of recession followed by 12 quarters of slow growth. BLS reports “the median annual earnings of salaried real estate sales agents were $39,760 in May 2006. The middle 50% earned between $26,790 and $65,270 a year…. Employment of RE brokers and sales agents is expected to grow 11% during the 2006-16 projection decades.”

I would argue with BLS. Improvements in productivity, innovations and advancements in technology will make it possible for each agent to sell more. Stiffer completion and higher entry level (both financial and technological) into the real estate realm will lead to less number of agents and higher income per agents.

The availability of computers and proliferation of the Ethernet is creating a new paradigm: “Ethernet search-Ethernet tour-Agent demonstration-Ethernet mortgage-Ethernet closing.” In this new cyber world, the agents with the technological edge will win. We will see larger allocations for Ethernet marketing, lead generation, office automations, SEO, etc. It also means a mobile world and more innovations for real estate applications for digital cameras and smart phones.

Prices of properties have declined substantially, making many areas look very attractive. The public will regain confidence and recessionary fears will subside. Resent antirecessionary measure will have a positive effect on core US industries including construction, and will help maintain a high employment rate and stimulate consumer spending.

In conclusion, the next President will have very little effect on real estate industry’s health. Unemployment rate among agents and brokers will be low. New exciting opportunities will be discovered on the junction between high tech selling and marketing, and old fashion salesmanship. The real estate industry is one of the pillars of the US economy, therefore the government will try hard to jump start it by continuing to offer low interest rates and other incentives.

Boris Gruzman is CEO of PropertyMinder.

For more information and to read the complete version of this article, visit www.PropertyMinder.com.

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