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New Years Prediction

By
Real Estate Agent with Nebraska Realty - NE RE# 20030540

Last year I was worried about the economy and the threat of higher gas price, which we definitely saw.  I don't think any predicted the credit mess and subsequent recession in 2008.  So let's put 2008 behind us and look forward to 2009.  Is 2009 going to a block buster year, I doubt it.  It will be a year of change that's for sure.  We have a new President and with that new hope that things can be put on the right track for our future. 

Here are a few of my predictions for 2009. 

First, I think gas prices will rebound and remain in the $1.75 to $2.00 range for much of 2009.  Oil markets have over reacted to the global slow down and will bounce back a little bit.  I would be surprised if they went much higher then $2.00.  The reduction in gas prices is acting like its own stimulus to the economy, which is good.

Second, interest rates should stay below 5.5% for most of the year.  Once again, the government wants to keep rates low to spur home sales, which will help both new home buyers and move up buyers.  I wouldn't be surprised if rates stay around 5%.  The number of home sales will be up from 2008, I predict they will be up 10% from 2008 However, home values in parts of the country will continue to decline.  Here in Omaha, I think home prices they will remain stable for much 2009. 

Third, job creation will be a key element to the U.S. economic recovery.  Unemployment I suspect will increase over the first quarter, stabilize and decline slightly by the end of the year.  Why?  The government has their foot on the gas pedal; actually, they have it floored.  This should spur some job creation. 

Finally, the stock market will definitely be interesting to watch in 2009.  With all the various stimulus occurring in the economy, companies will benefit from a stabilizing to increasing work force, savings from lower gas prices and stabilizing home values.  The first half of the year, I wouldn't be surprised if stocks remained flat.  Then in the second half see a rally towards the end of 2009, up only slightly for 2009 (under 6%).

Well, these are my predictions for 2009, not a rosy outlook.  But I think conservative outlook.  These are my own personal views, so didn't make any financial decisions based on them.  One thing with blogging is it will be interesting to go back and see what really happens next year.  What are some of your predictions for 2009?

 Thanks for reading.  Make it a great 2009.

 Steve

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