One reason is, pending home sales had fallen so low between February 1st and May 1st they were down 42% from the previous year numbers. Historic. The market had some serious catch up to do. Today, we are still far behind year ago numbers, but the spread has been cut to 17.5%.
Interest rates are another factor that helped sales in May. The cost of borrowing money has never been better and those who qualify can get the best rates in history. Inventory levels still stink and after falling in April remained pretty much unchanged during May. Todays buyer have 10% fewer potential homes to consider. Looking back in history you have to look back a long, long ways before finding fewer homes on the market in the Jupiter area as we kick off June.
Median home prices have pulled back a bit but that too was after both single family and condo prices had hit historic highs. There is a lot of talk of history and that’s because we truly are operating in uncharted territory.
Last night, we went over to my in-laws for Sunday dinner. Theirs is a house where the TV is always on. It’s almost always turned to the news but last night the screen was eerily dark. To me it was a blessing but it was, well, kind of historic. They freely admitted they had enough and could not bear to watch what was going on in this country any longer. The hate, the protests, the destruction, the virus, the debt, the election and everything else had reached a point they could not even watch.
Home sales are soaring, the stock market is soaring and one really has to ask why. After all, the reasons the TV was off last night all have pretty serious implications. There seems to be little correlation between what we see in the real estate and stock market performance and what we see in the streets and on the news.
Our economy is grappling with a historic recession. There’s that word again. The coronavirus isn’t going away yet. The violence over the weekend was historic. The hate for our President and the hate surrounding an election that is now only 155 day away are historic. Hurricane season here in Florida started today and we have already had two named storms. Over 40 million people have lost their jobs this year and millions of these jobs aren’t coming back. Consumer spending is going to see a pull back that is, well historic. Out in the street is sure looks like we are in for a long, slow and painful recovery. Maybe even a depression.
I see a real disconnect between what we are seeing in both the stock and real estate markets and an economy that could be heading for a real meltdown, The Fed has $7 trillion on its books to keep the economy and stock market afloat and are in the middle of adding $3 trillion more. The entire stock market value is less than $40 trillion and the Fed has a full 25% of that amount invested. Historic.
Yes, we have said historic, or history, fifteen times in this article already. Like it or not we are living it. The House has another $3 trillion dollar stimulus package that so far the Senate has not taken up but, al least some of it will be spent. I still feel here is trouble hiding just around there corner. Maybe historic trouble.
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