Wednesday, January 19, 2011

2011 Wisconsin Economic Outlook

The cover story to this month's Wisconsin REALTORS Association magazine is Stephen Malpezzi's economic outlook for the state for 2011. The recession, now "officially over", was not felt equally across the country; Wisconsin fared relatively better than some of the "really hard hit" markets in California, Nevada, Florida and others. "The national housing market has stabilized, but remains fragile," notes Malpezzi. "However, there is still potential risk from the defaults and foreclosures that much of the nation continues to experience."

What’s the Outlook for 2010 and Beyond?

The U.S. economy has a lot of inertia built into it; the good news this year is very similar to the good news from last year. GDP is growing, and with any luck, as firms exhaust their ability to squeeze more output from existing resources, employment growth will strengthen. Housing prices in Wisconsin, as elsewhere, have stopped their decline and appear to have stabilized. House prices are back in line with fundamentals, broadly speaking. We have done better than most states, though we’ve certainly had pockets of pain. The bad news is that a significant risk remains of downward overshooting, if we fail to successfully work through the foreclosure problem...We also need to keep a close eye on interest rates, and some of their fundamentals; for the long run, we need to get our fiscal house in order.

Click to read the full article and Malpezzi's recommendation for further reading.

For more from Wisconsin Real Estate faculty and their response to the economic crisis, visit our website.

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