Vision - November/December 2008 - (Page 6)

THe ecONOMIST ANALYZING FUTURE TRENDS ] • [ BY SHAWN G. DUBRAVAC As we enter 2009, the second derivative U.S. exports most of its technology prodof the real estate related indicators have ucts to Colombia with 15 percent tariffs. mostly turned negative. While the year- This is a relatively consistent story across over-year rate of decline continues, it does most products and industries. This means so at a decreasing rate. The housing market it costs American companies 15 percent more to enter the Colombian marwill bottom in the summer of 2009 ket than say Canadian companies on a national basis. Prices will conthanks to a recently negotiated tinue to fall for another year and FTA between Colombia and Cangeographical pockets of the country will continue to see difficult housada. Canadian companies now have ing fundamentals, but on a national a cost advantage over American companies in the Colombian marbasis the housing market once again ket. This 15 percent could be used will provide growth to the U.S. Shawn G. DuBravac by American companies to expand economy—albeit on a muted basis in 2009. their international business opportunities through marketing, promotions, or cost and innovation leadership. 2) The Colombia Free Trade Trade is a non-partisan issue as countless Agreement (FTA) is ﬁnally polls have shown. Americans do not always brought before Congress for a understand the nuances of trade, but they vote—and passes. The arithmetic for passage of the Colom- do generally support it. If my forecast for bia FTA is straightforward. Colombia 2008 holds, net exports will have repreexports most of its technology products to sented about two-thirds of total economic the U.S. with zero percent tariffs while the growth in U.S. for all of 2008. Given the Four Predictions for the Year Ahead Steven Puetzer/Getty Images Existing Home Sales 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2001 thousands of units A s we head into the final months of the year, the economy has been tumultuous at best. However there are some bright spots on the horizon for 2009. Here are four early New Year’s predictions: Existing home sales off 2.3m since fall of 2005 1) The housing market bottoms. The economy generally and the housing market specifically have remained the topic du jour throughout most of 2008. Since peaking in 2005, the residential real estate market has plummeted. Existing home sales are off nearly 2.3 million units from their pace in 2005, and new home sales are today well less than half what they were in 2005. Depending on your preferred source, home prices are off 10 to 15 percent and likely have another five to ten percent to fall. After adding 10 percent to U.S. economic growth in 2005 as measured by GDP, investment in residential real estate has directly shed 29 percent and 40 percent from economic growth in the subsequent two years respectively and is on track to pull GDP lower by 33 percent in 2008. 2002 2003 2004 2005 2006 2007 2008 Existing Home Sales (SAAR) Source: Census, CEA New Home Sales 1,600 1,400 1,200 1,000 800 600 400 200 0 2001 thousands of units New home sales off 874k since July of 2005 — 63% 2002 2003 2004 2005 2006 2007 2008 New Homes (SAAR) Source: NAR, CEA www.ce.org 6 November/December 2008 http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - November/December 2008

Vision - November/December 2008 Contents Shapiro's Spectrum In this Issue The Economist C4 Trends Going Global Visionary CES Unveiled Eco-Intelligence Is Vital in a Sustainable Global Market XGP— A Game Changer Enhancing the Tech Experience High-Definition Decade Public-Private Partnerships CEA Newsline Tech Speak Tech Policy Eye on Business Market Insider Just the Stats

Vision - November/December 2008

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