Now that I am back from Spain, I can tell you the experience was nothing short of a mind-opening and mind-blowing experience. This was my first trip abroad in two years and, believe it or not, this was our first trip to Europe and surely will not be our last.
My committee as well as other U.S. Global committees from a multitude of U.S. states were able to meet with over 800 individuals from other Global associations representing, France, Italy, Portugal, Belgium, many Asian countries, Norway, Sweden, Holland, and other countries. There were very pertinent sessions about where the local Spanish economy was and would be going forward as well as the global economy and its effect on our real estate market. There were also discussions on how our real estate business is morphing into a non-necessary office environment and is becoming a virtual one as we head into the future.
The caliber of current and future agents to provide professionalism, knowledge, expertise, disclosure and transparency will be much more important, as these concepts will become necessary, required and demanded by client sellers, investors, purchasers, renters and lessees of residential and commercial properties, in order to do business with them. Those going to join our business or are already in the business, whether for one year or 40 years, must still learn, absorb, apply and follow these most important ideals and ways to do business. Without them one will find this business very challenging and will no longer earn an adequate income. Making a living for many will become somewhat impossible, leading to more agents leaving and dropping out of the business.
Inflation and the mass printing of money by our Fed (our current debt is $22 trillion-plus and every 1% increase in rates will add $30 trillion to our national debt as per Nomi Prins, who is an American author, journalist, and public speaker who writes about Wall Street and the U.S. economy and I follow her) will have a potential major impact in controlling inflation. You have all noticed, the major increases in mortgage rates here in the U.S. over the last six months and the impact on real estate in the cost of purchasing, as well as credit card interest rates, costs of food, heating fuels.
Oil and gas as well as gasoline prices have risen to their highest point ever at 4.69-$5.25 per gallon. However, in Spain prices are $6.99 to $8.00 per gallon and going higher. The majority of transportation is divided among motorcycles, a multitude of electric scooters and EVs and small cars whose mileage is much more efficient than many of our vehicles’.
At the moment, our Fed and government is “between a rock and a hard place” and they are playing with fire by raising rates as fast as they have and as I have conveyed in a previous column, should have begun this process over a year ago. But now it’s too late to look back and realize what should have been done; as people say sometimes “hindsight is 20/20.”
Jerome Powell, our Fed chair, should have, could have, would have just won’t work anymore. We are on the precipice of not being able to go back and change what has already been done and right now increased rates have supposedly been the only solution to potentially solving our most treacherous inflation that by my estimation is running at 18% when you add back food and energy costs to the Consumer Price Index.
My professional opinion is that we all have to bite the bullet and not print much more money to fuel the economy. A recession could be the answer or worse a depression. For those who can least afford the costs today, it will get worse unless answers and solutions are brought about to a most serious financial situation that we have never really experienced before.
I hope and pray today on Memorial Day that we celebrate those who have served and lost their lives to keep our democracy and freedom intact. But,I worry about our future unless someone somewhere in Washington finds a miracle to cure what looks and feels like a catastrophic financial dilemma.
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Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] Just email or snail mail (regular mail) him with your ideas or suggestions on future columns with your name, email and cell number and he will call or email you back.
