Markets & Economy

Elliot Eisenberg’s 2015 economic outlook

Biggest concern is how Europe's slowing economy will affect our GDP

Elliot Eisenberg, Ph.D., is the founder of econ70.com.

Are you optimistic about the economy in 2015?

Yes, I think the economy will perform slightly better in 2015 than in 2014.

The housing market?

Existing house prices will rise by 5 percent, inventories will continue to increase, and because of continue good employment growth, the number of household formations will rise. Existing housing market activity should rise by 5 to 10 percent, while new housing starts should rise by 15 percent.

What are you worried about?

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My biggest fear for the year ahead is the health of the European economy. Normally, Europe alone would not be enough to worry about, but with China slowing and Brazil and Russia in recession, the export headwinds our economy faces along with increasing exports due to the strengthening U.S. dollar could chip 0.5 percent off GDP.

How much do you fret about global events?

While I am nervous, a strengthening U.S. can withstand many external shocks. That said, a war in Europe between Ukraine and Russia — or a Middle East conflagration — could be bad.

Will mortgage rates go up or down next year?

They will definitely rise.

Will home prices appreciate next year?

Homes will appreciate by 3 to 5 percent.

Will agents be more productive next year? Why or why not?

Probably not. The good ones are already doing well, and weaker ones will enter the market as it improves, thus preventing productivity from rising.

Will the portals play a bigger role in real estate next year?

Unlikely.

Are you making plans to expand, contract or maintain your business this year?

I am growing my business because the economy is growing and I do not want to miss out on growth.

What is the biggest challenge for the industry in the coming year?

Credit availability is far and away the No. 1 issue!