On March 23, 24, and 25, 2015, Pat Keltgen and I from the Heller Group attended the annual Land Conference sponsored by the REALTORS® LAND INSTITUTE in Tucson, AZ. It was attended by over 190 land specialists from across America.
The highlight of the presentation was conducted Tuesday a.m. when we heard presentations from Dr. Lawrence Yun, Chief Economist of the National Association of REALTORS®, Dr. Mark Dotzour, Chief Economist, Real Estate Center at Texas A&M University, and KC Conway, Senior Credit Risk Officer, SunTrust Bank. That was followed by question and answer period by the audience.
The U.S. economy has made some recovery from the 2008 recession, but the recovery has taken longer and has been less robust than normal. The U.S. normally has had annual growth of 3% per year or more prior to the 2008 downturn. Our growth rate in 2013 – 2014 was barely 2.5%, in comparison; China is growing at a 7% rate.
The consensus is that the main lagging sector has been the housing industry and particularly new home construction. The three economists concurred that the Dodd Frank legislation enacted by Congress in President Obama’s first term is the culprit behind that sectors poor recovery. Dodd Frank has created a fear of lending by large banks to home builders. 70% of our population lives east of the Mississippi River, the home of the U.S. mega banks. The economists agreed that the Dodd Frank legislation needs to be repealed or amended before proper lending will be available for new home construction and robust commercial lending. The Federal Reserve Bank has been attempting to stimulate the economy with quantatate easing, which is no more than a fancy term for printing money and keep interest rates low.
Another consensus item was that the Federal Reserve Bank will begin raising interest rates sometime in 2015.
I will share other tidbits from the conference in future blogs as well as updates to the farmland market.
By Roger Heller, Accredited Farm & Land Broker