Posted on May 14th, 2013
After this morning’s KNIGHT FRANK-led conference on the international housing outlook, predicting huge growth in demand for luxury real estate as global wealth expands, more news came in about the ever improving U.S. economy: The budget deficit will shrink this year to $642 billion, the smallest shortfall in five years….some good news from the government at last!
The nonpartisan Congressional Budget Office today reduced its estimate of this year’s likely shortfall by more than $200 billion compared to what it had expected in February. The agency pointed to stronger-than-expected tax receipts as well as payments to the Treasury by the government-owned mortgage financiers Fannie Mae and Freddie Mac for the change…..again, housing drives the economy forward.
The government ran its widest surplus in five years last month, with revenues up 28 percent compared with April 2012, according to the Treasury Department. That would be a major improvement from last year’s $1.1 trillion deficit, and would mark the first time since 2008 that the gap between taxes and spending slipped below $1 trillion.
Next year’s deficit will further shrink to $560 billion, CBO said. The deficit will continue to fall in 2015, according to the report, before beginning to grow again. The brighter outlook will help postpone the effective deadline this year for raising the government’s debt ceiling, and may ease demands from some lawmakers for tough budget cuts. House Republicans are scheduled to meet tomorrow for two hours to consider their strategy for the upcoming debt-limit fight.
Tax receipts for the fiscal year ending Sept. 30 will rise 15%, CBO said, partly because Congress allowed a payroll-tax cut to expire, partly because a January budget deal allowed taxes on the wealthy to rise and partly because of economic growth…..and improved unemployment figures.
So $ 2,500/sf may indeed be the new ‘new $ 2,000/sf ‘after all!