Ready, Set, GO! ——-> 2023
As we cross the 2022 finish line and take in a good stretch before lining up on the 2023 Starting Line, we reflect on the year behind us and look optimistically toward the rising Sun of the New Year ahead.
The Year Behind Us
This year was marked by substantial market turbulence fueled by both domestic and geopolitical factors. It is not my intent to go into any great level of detail on this but in my view, the most significant factors that influenced markets worldwide this year are:
- 1) The Federal Reserve took an aggressive stance against rising inflation causing interest rates to more than double causing the real estate market, the stock market, and even the bond market to head substantially lower. Not since the Great Financial Crisis of 2008-2010 has the stock market seen such a loss, this year ending down 19.4%. Real Estate Markets reacted more or less severely, thus far, depending on the location. The San Francisco market has taken it on the chin, and places like Phoenix, AZ, Boise, Idaho, and Austin, TX, which ALL saw massive runups in price as people fled urban centers for more suburban areas, are all in a major price correction. Parts of Florida, and especially certain asset classes, are also seeing major price adjustments. However, Miami has largely been unaffected despite some data showing that Miami has flipped into Buyer’s Market from a Seller’s Market.
- 2) The Invasion of Ukraine by Russia has caused unprecedented disruptions in virtually every market around the world because not only is Russia a major energy producer, but both Ukraine and Russia are massive food producers and Russia is probably the largest of the fertilizer oligopoly that is responsible for ensuring the world’s food supply. Enormous political hostility has circumnavigated the globe on this subject and it seems apparent to me that China, Russia, and others are seeking to dislodge the United States Dollar as the world’s reserve currency while I will not speculate on the outcome of this latest attack on the “New World Order” that was established at the end of World War II and by the Bretton Woods Agreement, I can accurately predict one thing, continued (and possibly increasing) global political and market VOLATILITY for all of 2023 and possibly into and through 2024.
- 3) COVID-19, specifically, how the Zero-Tolerance COVID-19 Policies of the Chinese Communist Party People’s Republic of China have resulted in everything from unprecedented supply shortages to a first-of-its-kind, nationwide protest of the government and its policies. While the media has widely ignored this or played down the significance of everything that has happened in China over the course of 2022 has and will continue to have massive, global repercussions for years to come. China is headed into the worst financial crisis in its history, largely driven by ludicrous real estate investments and financing practices that would never pass muster in Western society. Combining all of the above with the mass exodus of major companies from China to other, “anywhere else” places in the world to satisfy their manufacturing needs, the ongoing decoupling from China will continue to cause all manner of disruptions, shortages, political tensions, and possibly worse. There is literally SO MUCH going sideways in and with China right now it is difficult to point to any one article that truly captures it, however, one Geopolitical Strategist and Best Selling Author I follow says it best in just 8 minutes (click below)
The Year Ahead
The aforementioned points will continue to impact the world, including every person in the United States whether they are rich or poor, or citizens or non-citizens and I have already predicted that we will have more market, political & geopolitical volatility. However, there is a great deal of good to look forward to. I am not Nostradamus, but I am certain of several things.
- 1) OPPORTUNITY – Interest Rates will plateau. The Federal Reserve’s campaign to tame inflation will ultimately have to come to a pause as the money supply shrinks, borrowing costs lead to corporate earnings getting crushed into oblivion, and the United States enters what may be a severe recession. I am fairly certain there will be no “soft landing”, and I also believe that inflation resume because a “Strong Dollar” is punishing our global trade partners in ways no American Citizen can fully comprehend; easy money policies will have to resume at some point and, quite possibly, targeted stimulus operations may be necessary. I am in the camp of “inflation is here to stay for another 5-10 years”. There is a chance this forthcoming recession is going to be a different kind of animal as I am not certain we will see the wave of unemployment we saw in the last crisis as there is a substantial shortage in skilled labor that is only being further exacerbated by the inevitable retirement of the Baby Boomer Generation. These challenges will result in opportunities throughout the global economy that will create wealth, growth, and prosperity for those who remain positive in the face of adversity and who are able to “innovate negative circumstances into “take lemons and turn them into lemonade”.
- 2) LIFE – Regardless of the carnage & chaos being created by our world leaders, central banks, and corporatocracies, life will continue to go on and the world will keep spinning! I am going to have a great time raising my little girl who just hit the 3 1/2-year market earlier this month. My daughter, Aryel, is the single greatest source of joy, purpose, and focus I have ever had. She will be going into her last year of Pre-K and I wake up every day eager to witness more of her development.
- 3) CHANGE. One thing we are all guaranteed from any one period to another is change. For over 10 years I have been a completely independent businessman and a real estate licensee, the last 8 years of which I have been a real estate broker. On or before January 31st, 2023, Miami Beach Brokers® will fold into eXp Realty and operate as a team within eXp Realty, servicing the Miami Metropolitan Real Estate Markets and specializing in Miami Beach Real Estate. Interestingly, I will remain an independent businessman, but I will be working with a greater team of independents toward mutual success. I have been offered, many times, by good people I know to join this company, and each time I refused. At first, it was a Pride thing. I wanted to retain my independence as a real estate broker and businessman. Then my reasoning became less emotional and more logistical. Every person who previously tried to recruit me had good intentions and, of course, wanted to benefit from my future successes for having recruited me into the organization, but not one of them showed me any semblance of a clear and concise plan to both onboard me (and those who will join me) into eXp Realty as well as facilitate me/us to hit the ground running with the only three things that matter once eXp’s umbrella takes over most of the more back office and mundane concerns; Real Estate Sales, Agent Recruiting, and Training/Mentoring (in my case mentoring those I recruit). This morning, just before I wrote this article, I sent an email to all of my agents announcing this change. A copy of this letter will be shared in a forthcoming post.
Well, that’s a wrap for 2022! I am going to spend the next 10 hours of 2022 enjoying my family, calling friends, and tasting some good champagne! I wish everyone a happy, healthy, and prosperous 2023! Happy New Year!
Cheers!