Month: January 2025

By Neal Sandin

AI continues to permeate into society, spreading to every corner of our homes and workplaces. People are using it to help make emails more professional and resumes more appealing. Unfortunately for market research, some are using it to answer questions.

This is a significant issue. The entire purpose of qualitative market research is to understand people’s unique wants, needs, and desires, as well as the issues and barriers they struggle against. If respondents provide us with AI-generated responses instead, we are failing on a fundamental level. After all, AI generates answers that are compiled from huge amounts of data from millions of users. While undoubtedly useful, it cannot accurately reflect the unique circumstances of the individual. AI can tell us where the rents are rising, but it cannot tell us the feelings, emotions, and hopes of a specific tenant. 

One obvious solution is to simply rely less on methodologies such as online bulletin boards, which allow users to reply to questions at their leisure. Face-to-face interaction, either in-person or via Zoom or Teams, precludes using generative AI like Chat GPT. Direct connection would seem to make for more engagement and better results. 

However, sometimes online bulletin boards are the best tool for the job, such as when people try a product over the course of several days. Nor has there been a significant drop in the use of online bulletin boards, or similar forms of market research, since the advent of Chat GPT or other AI tools.

Another solution is to simply disregard AI generated answers and replace those respondents. This is possible when the AI is obvious, but as teachers and professors around the world can attest, no person or program can infallibly identify AI-generated responses. 

So, the question becomes, why? Why do people use generative AI instead of giving their own opinion? It is easy to fault the respondents, saying that they are lazy or in it for the money. That may occasionally be the case, but the answer is hardly that simple. After all, most people want to have their opinions and frustrations heard and taken seriously. Yet, some turn to AI to generate a response. It is disheartening to find that when asking for a personal opinion (in a confidential and safe setting), people do not feel empowered to give it.

By Stephen Kyne, CFP®

The markets in 2024 were dominated, largely, by AI/IT and the Fed. 

The S&P 500 and the NASDAQ 100 were up 23% and 25%, respectively. On the surface that may appear to suggest that stocks, in general, did very well, however a deeper dig shows that a huge share of returns were limited to a very few stocks.

The “Magnificent 7” stocks make up nearly 33% of the S&P 500 that you often see quoted, and nearly 50% of the NASDAQ 100, the other 493 and 93, respectively, make up the rest. Weighting in these indices is proportional to the size of the companies. If you flatten it out and take all 500 companies in the S&P at equal weight, you’ll find a return of only about 12% for the year, which paints a very different picture. Investors have plowed funds into these few names, at the expense of the broader market. 

Looking ahead to the new year, we are cautiously optimistic about US stock markets providing positive returns for 2025. Much will depend on the governing policies and priorities of the new administration, which we believe we’ll learn in rapid succession in the third week of January. 

It was announced by the Presidend-elect that we’ll be re-naming the Gulf of Mexico the “Gulf of America”, as well as putting “substantial” economic pressure on Canada to surrender its sovereignty and become the 51st state. Once those very pressing issues are settled, maybe everything else will fall into place, and we can end this piece here. 

If only that were true…

Sideshows like these create unnecessary distractions and uncertainty for businesses and the markets. If there is one thing financial markets crave, it’s certainty. Volatility arising from this uncertainty is likely to affect domestic and international markets, as investors vacillate between bullish sentiment and defensive posturing. 

By Sara Mannix

Looking back at 2024, I’ve seen the digital marketing industry undergo remarkable changes. It’s been a year of rapid technological advancements, evolving consumer expectations, and the ongoing influence of global economic uncertainties. For me—and so many of us navigating this field—the new year has been a mix of challenges, exciting opportunities, and groundbreaking innovation.

As I reflect on the past year, one thing remains clear: no matter the state of the economy—whether tightening, as we saw in 2024, or expanding, as many predict for 2025—digital marketing continues to play a vital role. It’s where businesses connect with people in the spaces they spend the most time: online. From social media to search engines, digital platforms are where brands thrive—or fall behind.

Key Trends Defining 2024 That Shed Light on 2025

Artificial Intelligence: Moving Beyond the Hype

AI has shifted from being a buzzword to an essential digital marketing tool. I’ve seen how platforms like ChatGPT and AI-driven personalization have transformed how we connect with audiences and tailor experiences. But there’s a fine line here. In conversations with industry peers, especially in groups like the Bureau of Digital Agencies, the focus has been thoughtfully leveraging AI. Those who use AI simply as a shortcut to manipulate systems may see fleeting success, but that approach is unsustainable. The real winners in 2025 and beyond will be those who balance automation with authenticity—using AI as a tool, not a crutch.

Content’s New Frontier: Video and Interactive Media

Video content is still king, but I’ve noticed a growing interest in interactive formats like live streaming, polls, and augmented reality. TikTok, Instagram Reels, and YouTube Shorts continue to dominate, but the push for immersive experiences is opening up new opportunities. For us, the challenge is in finding creative ways to integrate these formats into campaigns that engage audiences and keep them coming back for more.

By Dorothy Rogers-Bullis

As we step into 2025, the question on everyone’s mind remains: “What’s going on with Return to Office RTO)?” My answer? It depends.

I’ve been asked this question so many times, I should probably print it on a t-shirt. As the president of drb Business Interiors and co-founder of Saratoga CoWorks, I’ve seen the challenges and opportunities from every angle—whether it’s a business owner trying to coax employees back to the office or an employee wondering if they can work from home in their pajamas just one more day. Spoiler alert: It’s complicated.

   Making the Office Worth the Commute

When business owners ask, “How do I get my employees back in the office?” My first response is simple: Make the office worth coming back to. Let’s face it, if your office looks like a scene from a 1990s sitcom (complete with beige cubicles and fluorescent lights), why would anyone trade their home office—where the coffee is free, the dress code is sweatpants, and there’s a dog under the desk?

Today’s offices need to offer more than just a place to work. Think ergonomic chairs that don’t scream “chiropractor visit pending,” collaborative spaces that spark creativity, and yes, even some creature comforts like good coffee and snacks. In 2024, we redesigned countless offices to include these features, helping businesses create environments that employees actually want to be in.

              The Flexibility Factor

But it’s not just about the furniture. Flexibility is the name of the game. For decades, the 8-to-5, Monday-to-Friday schedule was the gold standard. Now, employees want hybrid schedules that let them balance work and life without sacrificing either. Business owners who adapt—offering staggered schedules or remote work options—often find that productivity improves along with morale.

That said, flexibility must be carefully managed. Many employees have shared that working from home often comes with higher expectations for productivity. Without clear boundaries, this can lead to burnout. Striking the right balance is crucial. Instead of offering one work-from-home day each week, some businesses find that a few days a month makes more sense. Again, it depends on the business and the team.

By Cecil Provost

Well, 2024 was pretty similar to 2023 in Saratoga real estate and home building… great if you’re a seller, and tough if you’re a buyer.

Although mortgage rates were predicted to drop in 2024, that didn’t happen. Mortgage rates were around 6.5 percent in January 2024, climbed to about 7 percent by May, briefly dropped to about 6 percent in September, and ended the year back in the 6.5 percent range. Saratoga County home prices continued to climb, because the demand is still much greater than the listing inventory.  Most homeowners aren’t selling, due to the “lock-in” effect; if they have a 3 percent fixed rate mortgage and current rates are over 6.5 percent they aren’t selling unless necessary – and that won’t change anytime soon. So, inventory was low, demand was very high, and prices continued to climb. When a new listing came on the market in 2024 we saw immediate activity, multiple offers, rapid sales, and higher prices.   Although the number of closed sales was lower than normal due to limited inventory, our median sale price increased nearly 6 percent in 2024, the average market time was only 11 days (historically speaking, 90 days is “normal” in our area, and I’ve seen it as high as 130 days), and most sellers got full price or more (our historical average is 96.5 percent).  In a “normal” year the higher prices and interest rates would have made selling a home more difficult, but demand is so overwhelming in our area that the only listings that don’t sell in 45 days are the ones that are grossly overpriced.

In 2024, as in past years, many potential home buyers that were frustrated in their home search turned to my new construction. As a result, every good builder and subcontractor in our region is buried with work. Our construction companies, Saratoga Construction and Saratoga Modular Homes, received a record number of new customer inquiries in 2024 and shattered our previous records for both number of home sales and total sales volume, despite much higher construction prices and interest rates. (Construction costs were up about 6 percent in 2024).  Thankfully most of the supply chain issues that we experienced during the pandemic have been resolved, but there’s still a huge shortage of skilled workers in our area.

So what’s ahead for us in 2025 and beyond?  In my opinion, more of the same.  If mortgage rates drop below 6 percent as predicted, that will stoke even greater demand – but probably won’t convince most homeowners sitting on a 3 percent mortgage to sell, so resale inventory will remain tight and bidding wars/price escalation will continue. The recently announced significant expansions of both Albany Nanotech and Global Foundries will bring another wave of affluent home buyers into Saratoga County.  As a result, demand for resale homes and new construction will continue to be “off the chart”. As I write this on January 2, Saratoga Construction is nearly booked for 2025, and we already have several projects in planning for 2026 – and prices are going nowhere but up. NAHB predicts overall costs to increase 6 percent-7 percent in 2024. (Historical average is 3 percent-4 percent per year). Customers are always asking me if/when I think the construction costs will come back down, and my response is “probably not in my lifetime, certainly not in the next 10 years around here”.

BY PETE BARDUNIAS

In some of the social circles I inhabit, “DEI” can be considered a bad word. This is unfortunate. If we can get past the political machinations, we might well find that 2025 is the year for a big DEI breakthrough in Saratoga County and the greater Capital Region. One of the reasons:   Neurodiversity. A big word which means “individual differences in brain functioning regarded as normal variations within the human population,” according to Webster.

Consider these statistics. One out of every 36 children is estimated to be somewhere on the autism spectrum. One out of every 28 children has an incarcerated parent. One out of every 20 suffer from Fetal Alcohol Spectrum Disorder (FASD), a category which isn’t even considered an “official” disorder, and is totally preventable.  One out of every four women (and one out of seven men) will endure some form of domestic violence in their lifetime, and 22 veterans commit suicide every day. 

Better understanding of how both these biological and societal factors contribute to the emotional stability and mental health across our population can be beneficial. Just think of the statistics mentioned above, and what they might do to inhibit people from reaching their full workplace potential. Think of the impact it can have, if we could resolve them to any great degree. It would be the single biggest workforce development initiative the Capital Region has ever seen. A sensitivity to neurodiversity can help move us in the right direction. It is exciting to see some of this already in action.

 For example, Assemblywoman Mary Beth Walsh promotes ThinkDIFFERENTLY, launched by then-Dutchess County Executive Marc Molinaro in 2015, which advocates consideration for people with sensory, hearing, mobility or visual issues. The Saratoga County Fair turns down the noise for a few hours on one of its days, to provide a more welcoming environment for sensory-impacted guests. At St. Christopher Fitness in the Clifton Park Center Mall, owners Jomilson and Theresa Alvarez provide a smaller space, different, often subdued, lighting, elements of mood, and sensory stimulation to help people with autism or other challenges get their exercise regimen in a comfortable setting.  People who wouldn’t otherwise get to exercise have the chance to do it in a way that suits them.

by Mark Shaw

When it comes to technology the outlook for 2025 is split between compliance and AI utilization. What do we mean by this? We mean if you are in a HIPPA  (Medical Records) medical records or in any line of contracting for the federal government (CMMC) you will be impacted by some new regulations on your business.  You may not even be aware of them. 

For example, passed in the final hours of 2024, companies that fall under the HIPPA guidelines are now required to do two more things to protect their patient data. One they must have their computer systems scanned for vulnerabilities every quarter. This means four times a year you are expected to have a complete scan of your system to understand the current state of your IT health. Secondly you are expected to do annual penetration testing. This is where an outside firm tries to access your systems and data without being given permission. Once completed this report is shared with you and your technology provider to give a list of recommendations on how to remediate any shortcomings.

Interestingly HIPPA was created in 1995 and to date there has been very little “teeth” in the law and many practices are simply just saying “It is not for me, I’m too small, too specialized, not important enough, don’t have enough data to report on” We see this quite regularly.  Medical firms are focused on their main jobs and not the technology side. 

This is expected to no longer be the case. The new guidelines are letting regulators to get tougher on everyone. If you are not considering this and you have a medical practice, you should consider talking to your technology provider today to ensure you meet the requirements.

If you are in any industry touched by federal government, from a direct contractor for services, manufacturing for them or even being janitorial services with clients in the government space, you are being forced to adopt stronger guidelines and comply with the new CMMC rules.  

By Steven Luttman

U.S. homeowners are sitting on approximately $35 trillion dollars of home equity. While rising values have been great for some, simultaneous higher prices and mortgage rates continue to leave many out in the proverbial cold. Should relief come, many expect it would not be in the form of falling prices, but instead in lower borrowing costs. We’ve seen the Federal Reserve lower rates on the short end of the curve with little/no impact to housing, so where else can we look? Spreads.   

When we say ”spread”, we’re not referring to your favorite sports team catching six points determined by Las Vegas against a rival. Instead, it’s the difference between two benchmark rates. From a mortgage loan perspective, the significance of the 10-year U.S. Treasury yield can’t be overstated. On the surface this may not make a lot of sense. According to online lender Homebuyer.com roughly 9 out of 10 applications in 2022 were for a fixed rate mortgage spanning 30 years. With that in mind, why not focus on a 30-year instrument for a true apples to apples comparison? When taking into account refinances along with property sales, the average mortgage lifespan is actually only 8 years long. Turns out your “forever home” is rarely ever that. Keep this in mind when deciding if buying down your mortgage rate is in your best interest.  

Mortgage rates trade above their Treasury counterpart due to several factors. These include servicing costs, secondary market appetite and duration risk. Equally important however, is default. While unfortunate, the chances of a household not making payments (1.73% of mortgages were delinquent as of Q3 2024 according to the Federal Reserve System) does exist. Compare this with U.S. government debt, which is viewed globally as “risk free”. The belief in repayment is in large part why there is a discrepancy.

While a strong correlation in movements between the two does exist, differences do occasionally occur. Economic conditions play a role in the discrepancy. As explained by Grey Gordon, Senior Economist with the Federal Reserve Bank of Richmond in his 2023 research paper “Mortgage Spreads and the Yield Curve”, spreads increase during times of financial uncertainty. The thesis is money flows into long dated government bonds for security, inverting the yield curve. Refinance activity from owners chasing a lower rate shortens expected term duration, causing mortgage prices to become more sensitive to short-term Treasury rates. Ultimately this leads to higher mortgage rates relative to the 10-year Treasury yield and creates wider mortgage spreads. A very complicated way of saying that evidence shows forces push up mortgage rates during times of economic slowdown. 

By Michael Brodt

As I write this final State of the Economy and Markets for 2024, we are just days away from the winter solstice. However, the cooling off of the broader U.S. stock markets has preempted the official start of winter. The Dow Jones Industrial Average recently fell for the 10th straight day—its longest losing streak in 50 years—and on Wednesday, December 18, stocks suffered their worst trading day since August. Wednesday’s drop came in response to the Federal Reserve forecasting more stubborn inflationary pressures and fewer rate cuts in 2025 than had previously been discussed. Over these several days, the Dow dropped 6%, the S&P 500 3.5%, and the Nasdaq 1.8%.

Despite this recent weakness, the broader markets appear to be well on their way to wrapping up a second-consecutive banner year. The three previously mentioned stock indices are each still near their all-time highs reached in early December. With the Nasdaq at nearly 33% for the year—followed by the S&P 500 at 26% and the Dow at 14%—stocks have surpassed the majority of 2024 forecasts. A healthy rally taking place today, December 20, is recouping much of the decline realized on December 18.

A positive takeaway from the Federal Reserve meeting is its projection for stronger economic growth and lower unemployment for 2025 than previously thought. This, followed by real gross domestic product (GDP) growing at an annual rate of 3.1% compared to the previous estimate of 2.8%, indicates that the U.S. economy is in good shape, with no recession in sight as we head into 2025. A strong U.S. economy and increasing corporate earnings could very well set the stage for a continuation of this current bull market, which began in October 2022.

Two impediments to a third-consecutive year of gains for the stock markets would be (a) higher-than-expected inflation, and/or (b) weakness in the narrow group of stocks that continues to fuel a large portion of the market’s gains. While 2024 saw increased participation compared to 2023, artificial intelligence (AI) and the stocks that have come to be known as the Magnificent 7 (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla) led the charge once again.