Dr. Elliot Eisenberg has a clear message for those worried about economic uncertainty in the year ahead.
“The economy is fine,” Eisenberg said. “It’s fine. It’s fine. It’s fine.”
Probably.
There are no sure things in forecasting what the economy will do and how it will affect real estate, but Eisenberg — aka The Bowtie Economist — shared his expectations for what’s on the horizon during the recent Mainstreet REALTORS® Economic Outlook event in Rolling Meadows.
Hundreds of real estate professionals gathered Jan. 21 at Meridian Banquet and Conference Center to hear Eisenberg’s views. Eisenberg is known for his humor and lively presentations, making dry economic data easy to digest. He is a former senior economist with the National Association of Home Builders.
He said the current state of the housing market is “better than you think.”
Some reasons for optimism include:
- The gradual uptick in housing inventory in 2024, although Eisenberg acknowledged that inventory overall remains “painfully low.”
- Inflation has decelerated rapidly, and that is likely to continue this year.
- The Fed is likely to make more rate cuts, which should work in favor of the economy as a whole and mortgage rates.
- Eisenberg expects that 2025 will be “a decent year” for real estate, with existing home sales increasing as inventory improves and mortgage rates dip.
Eisenberg took equal shots at the economic plans of President Donald Trump, former President Joe Biden and former Vice President Kamala Harris. He said Trump’s plans for energy, deregulation, tax cuts, immigration and tariffs/trade are a mixed bag, offering some good and some bad for the economy.
The economic indicators Eisenberg will be watching most closely in 2025 are related to jobs. The job market, which has seen historic lows in unemployment, is softening, he said. The quit rate among employees is dropping, meaning it’s not as easy to find work. Wage growth is strong but no longer spiking as it did shortly after the COVID pandemic.
If the job numbers return to normalcy, then things will be fine. If they turn sour, that could portend difficult economic times ahead, Eisenberg said.