(Greensboro, N.C.) January 29, 2013 — Mark Vitner, Senior Economist for Wells Fargo, said that he expects the country will be going through sequestration on March 1.

Vitner discussed the 2013 Market & Economic Forecast before a group of close to 100 Triad community members at a Monday luncheon at the Piedmont Club that was hosted by Wharton Gladden, a private real estate investment banking firm.

“I think it will happen,” Vitner said of sequestration. “The process has gone from being unbearable to being the least painful.  They have no better alternative on the table.”

“And because people won’t know how this is going to play out, I don’t think we’ll see a lot of growth in the first quarter.  Businesses are reluctant to commit to long-term capital projects until they get a little more certainty.”

Vitner also told the group he expects interest rates will go up in 2014 instead of 2015.

“You don’t keep interest rates down for four years with no cost,” he said.  “There is a cost.”

On the brighter side, he said that more companies are adding jobs than they were this time last year, and the housing market, especially apartments, is thriving.

Vitner and Algenon Cash, Managing Director of Wharton Gladden & Company, explained a variety of factors that will impact the economic forecast for the coming year, both nationally and locally.

“Banks are awash in deposits, which means most financial institutions have plenty of cash to lend,” Cash said.  “The real challenge is the dramatic shift in underwriting standards.  Borrowers have much higher hurdles to jump when applying for credit, and that is creating some real challenges for businesses requiring capital to expand.”

“Multifamily is the one bright spot in the real estate market,” Cash continued.  “Most core markets are outperforming, and even secondary markets like the Triad are seeing positive signs.  I suspect multifamily will continue to lead the recovery in the real estate community through 2013.”

“In addition, long-term interest rates that are well below the historical average are leading to a boom in mortgage refinancing,” Cash said, and he expects interest rates will remain beyond favorable, barring any unforeseen circumstances, such as new eruptions in the European or American fiscal crisis.

“I thought it was extremely informative,” said Gloria Whisenhunt, Vice Chair of the Forsyth County Board of Commissioners.  “It gave us an insight into what to expect for the coming year.”  She said the information will be helpful as she is dealing with the county’s budget, and she added that she learned that growth will likely not increase quite as quickly as she had hoped it would.

“I like to hear Mark,” said Penny Whiteheart, Executive Vice President of Piedmont Triad Partnership.  “I think he’s one of the more reliable forecasters — with a local flavor. It sounds like he continues to feel relatively optimistic about the growth that we’re seeing.”

Lou Baldwin, President of Baldwin Properties and the 2012 president of the N.C. Association of Realtors, said he found the information to be very positive regarding the housing market.

“I think we are fortunate that Algenon and Wharton Gladden provide this information and provide speakers like Mark Vitner,” Baldwin said, adding that a lot of decision-makers attended the meeting.

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About Wharton Gladden & Company:

Wharton Gladden & Company is a uniquely designed boutique investment banking firm that specializes in providing strategic advisory services, underwriting, capital placement and private equity for a diversified client base that includes corporations, real estate developers, financial institutions, investors, municipalities and high net worth individuals.