Home Sales Continue to Help Bolster the Eeconomy

August 25, 2023

Good morning,

The economy continues to be characterized by both encouraging signs and reasons for pause. Interest rates remain on the uptrend and are likely to continue for the near term as Treasury rates respond to ongoing strength in the underlying economic data. At the same time, new home sales and new residential construction give reasons for hope that home sales will continue to help bolster the overall economy.

In addition, the backbone of economic growth—consumer spending—continues to show strength despite many headwinds that suggested retail sales would have begun to slow by now. These are all signs that the Fed may be closer to achieving its soft landing, but the leading index suggests that we should remain cautious in our outlook.

Information + Updates

DID YOU KNOW? 

Credit card balances for Americans hit a record $1 trillion this year, according to a report from the Federal Reserve Bank of New York. But revolving debt, which mostly includes credit card balances, contracted in June as the US consumer puts the brakes on spending. Credit card interest rates are around 20% these days.... The average credit card debt in the US is approximately $5,733....at 20%, that's $95 in interest per month! (CNBC)

DID YOU KNOW? 

If you built your house 55-years-ago like I did, it’s a one time outlay … and you get an inflationary expansion in replacement capital without having to replace yourself.” - Warren Buffet

DID YOU KNOW? 

Higher wage earners are drawing on unemployment benefits at three times the pace of lower-income households, according to the Bank of America Institute. (WSJ)

DID YOU KNOW? 

The average homeowner in the US stays in their home for about 13 years: If we are home-buying-age adults for roughly 40-50 years, that's about 3-4 homes in a lifetime. Your first home is almost never your forever home.

DID YOU KNOW?

The rich are getting richer.....in California! From the end of 2019 through 2021, California added more than 116,000 millionaire taxpayers, a record for a 2-year period, more than in the previous decade combined. Residents making more than $50 million surged 158% to 3,182.....and California’s billionaires added $270 billion in wealth. (Bloomberg)

DID YOU KNOW? 

Foreign investment in the US soared over 43% in 2022 compared to 2012. fueled by government subsidies. The U.S., which is offering $369 billion in incentives and funding for clean energy is seeing a windfall of foreign investment. Germany's BMW just broke ground for a new battery plant in South Carolina. South Korea's Hyundai and LG announced a $4.3 billion battery plant in Georgia. Panasonic of Japan is building a plant in Kansas. (WSJ)

DID YOU KNOW? 

Texas led clean energy installations with 9.2 GW installed in 2022, followed by California (4.7 GW), Oklahoma (1.5 GW), Florida (1.2 GW), and Nevada (0.9 GW). Texas is the state with the most clean energy in development, about 18% of the total development pipeline, followed by California (9%), New York (8%), Indiana (5%), and Virginia (5%). (FT)

DID YOU KNOW? 

Are we becoming obsessed with the 'latest fashion' or are we programmed to adapt to new things faster? Netflix took 41 months to reach 1 million subscribers...Twitter, 24 months......ChatGPT took 5 DAYS.... currently we are in the fear-mongering stage of the cycle, and fear SELLS! Seeing the downside of new tech is always easiest, but the upsides of this accelerated AI intelligence may be exceptional in fueling efficiencies and saving time.

Real Estate News

Where is the housing wire going? Logan Mohtashami is a lead analyst for HousingWire. I listen to his analysis weekly….

This last episode, I found a few interesting facts:

• There is so much nested equity in the US household today. 42% of homes in the US do not have a mortgage.
• At the end of this decade there should be a great wealth transfer from the Baby Boomers to Gen X and Gen Z. What the recipients of this wealth do with it will be very interesting.  
• GenX are the biggest home buyers in America currently

For Fun

With all the craziness of the world today, it is videos like these that make my heart full… Thanks Al!

For Sale

322 Emerald Bay

$14,900,000

6 Bedrooms | 7 Bathrooms | 5,493 Sq.Ft.

A highly desirable and rare luxury 6 bedroom Emerald Bay residence has come to market. Flawless custom construction seamlessly incorporates a clean contemporary style with affluent coastal living.

This home was designed with ultimate privacy in mind and to enjoy the ocean and Catalina views. Nearly 5500 square feet of spacious living surround an exquisite outdoor courtyard complete with a spa, covered dining loggia, outdoor fireplace, grilling station and lush landscaping. Nearly every room welcomes ocean breezes and ample natural sunlight through over-scaled windows and doors. Several balconies wrap the front exterior of the home extending the living area.

The chef's kitchen boasts high-end appliances, a large island and a dumb waiter to transport food items from the garage level. The three-car garage includes a space for a golf cart that will easily whisk you down to Emerald Bay’s pristine white sand beach. 

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There are currently 2 active homes for sale in Emerald Bay

ranging in price from $11,995,000 to $14,900,000.

We have one property currently in escrow.