The year 2002 has finally arrived, and like clockwork, everyone wants to "bless" us with his or her opinion on the economy for this year. Good or bad, we get to hear what they think we can accomplish this year based upon their suprior interpretation of economics, finance, business strategy, world events and politics.
Only a month after the new year, everyone has put last year behind them and is moving on. And, in the opinion that I want to "bless" you with, moving on is a very good thing. I say this because, in my opinion, 2002 will be a good year. There, I said it. Now, go seize the day.
Now that you know this will be a good year, what are you going to do? Are you personally going to have a good year or a bad one? Do you really need to hear this will be a good year before you get to work and make this your personal best year ever?
And, furthermore, does "it’s going to be a good year" have to be "true" before you proceed to put in the necessary time, energy, action and thought to make it happen for yourself? More importantly, what if I said this is going to be a bad year? Would you just quit trying to better yourself until someone said it’s going to be a better year?
In economics, business and finance, perception is often as important, if not more important, than reality. As a community, if enough individuals believe in and work toward this being a good year, then collectively it’ll be a good year, almost despite a bad forecast. Doctors know this and prescribe placebos. Moms know this and tell their kids "where there’s a will, there’s a way." Expectations are contagious, and you may be susceptible to them just like a smile or a cold.
Currently on the national scale, some pundits see only the bad news. And yet, some businesses and some individuals will succeed like true Americans beyond their wildest dreams, in spite of all this negativity.
Locally, things didn’t hit us nearly as hard as the Lower 48. Instead, we’re dealing with BP layoffs, fewer tourism bookings, reduced air freight and air travel, and lower oil prices. You know, Alaska really has only one dreary forecast that gets recycled every few years.
Once again, many companies and individuals will succeed like true Alaskans beyond their wildest dreams this year, almost in spite of the negativity listed above.
Fortunately, we have plenty of good news, too. We still have lots of new construction projects, a strong real estate market, low interest rates, a growing airport system, expanding health care industry, low or no taxes, lots of federal development money coming in to Alaska, more net jobs than last year, a strong and growing services market, and a positive, albeit a small one, rate of growth. Also, plenty of fortune-tellers claim the U.S. economy will climb out of recession by the time flowers bloom this spring.
And now, back to real property. Without letting precise numbers, percentages and demographics get in my way, I can safely say that Anchorage has more buyers ready, willing and able to buy than there are homes available. We have more jobs than last year. We have more people than last year, and new people keep moving to town. Most need and take jobs but they also bring their resources, purchasing power and ideas with them.
We have a high percentage of homeowners and yet, about a third of our town rents. Many, many people bought over the last several years when prices hadn’t yet caught up to the true market value and have thousands of dollars in equity tied up and now they’re ready to get a bigger place.
Taking all of this information into account, I’m here to tell you that more than one huge growth market exists in Anchorage and in Alaska. Real estate, a large part of anybody’s financial security, and all of its related peripheral goods and services, is just one of those industries that will grow.
Over the next several years, new construction must expand, but the real nuggets of value available to the general public will be found in remodels, expansions, upgrades, stepping up to larger homes, investment properties and rentals. I predict that lots of real estate professionals will be teaching "First Time Home Seller" seminars to help people take advantage of these trends. This will be a good year!
Ken Jelinek is an associate broker with RE/MAX Properties in Anchorage.