Pending sales of existing U.S. homes are up while personal incomes are down. As previously outlined, locally a lot will likely come down to (un)employment.
∙ Pending Sales of Existing Homes in U.S. Surge 3.6% [Bloomberg]
∙ U.S. Incomes Fall 1.3%, Biggest Drop in Four Years [Bloomberg]
∙ San Francisco County Unemployment Jumps To 9.8 Percent In June [SocketSite]
Pending home sales were up in June and for the fifth month in a row (first time that happened since 2003). May numbers were revised upward as well.
There is an good article at Naked Capitalism
http://www.nakedcapitalism.com/2009/08/what-does-double-dip-recession-look.html
in which the author argues that unless personal income growth is able to outpace the declining effects of the stimulus, that we will end up in a double-dip, with the second dip being larger than the first. He also argues that whatever state the economy is in when personal income growth levels off will be the “new normal”, and that we wont reach the GDP levels of ’07 for a long time to come. He also argues that he believes the current recession is almost over.
I would only add that you should look at median income growth rather than personal income growth, since most of the delta between the two is not available for consumption demand.
Sales of SF SFHs were up in July as well (YOY)
Thanks Robert. That is quite scary…. and I don’t understand how ppl are able 2 sustain this type of surge in home purchase even in this type of economy, and also considering that personal income is declining….
I wonder if I am “missing out” on something. Are these people who are buying up the properties making some sort of income that doesn’t have to be disclosed to IRS (ex. Drug peddling, p1mpin’ etc) ????
How else can anyone explain this disconnect logically ? Or does it all come down to our Capitalistic Outlook for over a century ?