Seeing the Future
Peering into my crystal ball fortrends affecting (for better or worse) the Fredericksburg Texas real estatemarket I see:
1. 1. Mortgageinterest rates will rise. Bumpingalong near historic lows for the last several quarters, these rates are undertremendous pressure to increase as they are the single largest factor affectingthe current weakness in the value of the U.S. dollar. The weak dollar is reflected most prominently in the recordprice we are now paying for oil (and hence, gasoline), food and other consumerstaples.
2. 2. Itis only a renewed strength in the U.S. dollar (created, in part by risinginterest rates) that will ease our pain at the pump (in the sort term) but lookfor the price of oil to remain well over $100/bbl and gas to remain above $3.00/gal.for the foreseeable future. Theever-increasing global demand will not be abating. The silver-lining in this is that folks will travel but staycloser to home which has traditionally benefitted the community ofFredericksburg TX with our proximity to Austin, San Antonio, Dallas andHouston.
3. 3. Painat the pump will continue to translate into decreased US demand for oil/gas,increasing pressure on politicians to produce more “supply” and more downwardpressure on consumer spending.
4. 4. The“credit markets” will recover from the sub-prime fiasco but lenders will beever-more cautious about extending credit to all but the most well-qualifiedborrowers. This, in turn, willcontribute to a continued “softening” overall of real estate markets whereprices in most areas will not return to their pre-2007 levels for some time.
5. 5. Thevalue of and demand for rural real estate will recover quickly be the lead thesector in sales volume and appreciation (especially land with surface waterand/or capable of producing a consumer crop). Provided existing tax rules (valuation methods, exemptions,capital gains, etc.) remain relatively constant, there is no place else toinvest sizeable funds with very little risk, very low carrying costs andhistorically favorable returns.
6. 6. Evermore savvy real estate buyers/investors/sellers will rely more and more on theinternet to research purchases/comparable sales, etc. and appreciate thatmarket knowledge, experience and outside-the-box thinking will increasingly befound outside the doors of the more traditional “branded” models of brokerageservice providers.
7. 7. Asthe internet continues to be the “great equalizer” in the real estate industry,consumers will realize that bigger is not necessarily better and that industryknowledge and market experience will trump “branded name recognition” everytime.
8. 8. Fractionalreal estate offerings and purchases will emerge as the single most importantinnovation in property ownership in the last 25 years. Popular in high-end resort-orientedcommunities for years, this “new” form of ownership will open a door to luxuryownership that simply has not been available before now. The ability to own a deeded,mortgage-able, depreciable and inheritable share of high-end property (one thatwill likely appreciate and can be bought or sold as easily as a single familyresidence) will unlock billions in baby-boomer wealth that has heretofore beenunable (or unwilling) to pursue the second home of their dreams at a fractionof the traditional price.
Remember, you heard it here first!

