Did We Inflect and Not Even Realize It?
OK, I am NOT saying that the bubble has burst and I am NOT jumping up and down saying that I was right and that I am so damn smart.........BUT, I did posit in a Sept. 14 post that the Sept. 20th Fed meeting had the potential to change the sentiment that is driving the housing market to dizzying heights. I argued that it is more than just rates, we have to look at what's motivating the animal spirits behind the housing boom. Based on this, I thought an inflection point is close at hand. Well, today there is a Bloomberg TOP story about Manhattan apartment prices falling in the 3rd quarter, and falling significantly. I can't link to the Bloomberg item, but here is other coverage. Compare this to where we were just three months ago.
Let me state the caveats and counterpoints first. This could be meaningless. The third quarter is not generally the most active period of the calendar for home sales (although recent 3rd quarters have been good). Also, Wall Street bonuses are set to be quite good this year, so the key punters could be holding off until their '05 bankrolls are revealed in December and the checks are cashed in February. Also, the FOMC meeting came at the end of the 3rd quarter and its outcome could hardly have influenced the whole quarter's data........BUT, despite the precise timing, what I outlined could be unfolding. Alan Greenspan has said you are going to get increasingly better rates on your cash and lendable capital going forward and the putatively fragile US economy is looking alot less fragile based on some recent numbers. Perhaps, just perhaps, people are starting to feel that they can do better with their money in the typical alternatives to housing - cash, bonds and stocks which have been non-starters in recent years, wot with corporate scandals and sub 1% MM yields and all.
P.S. I have a stated in a few of the linked posts above what I think of the Euro's prospects. Guess who have been big buyers of US property Yup, Europeans. Will a $1.10 Euro curb this source of demand? Hmmm.
Let me state the caveats and counterpoints first. This could be meaningless. The third quarter is not generally the most active period of the calendar for home sales (although recent 3rd quarters have been good). Also, Wall Street bonuses are set to be quite good this year, so the key punters could be holding off until their '05 bankrolls are revealed in December and the checks are cashed in February. Also, the FOMC meeting came at the end of the 3rd quarter and its outcome could hardly have influenced the whole quarter's data........BUT, despite the precise timing, what I outlined could be unfolding. Alan Greenspan has said you are going to get increasingly better rates on your cash and lendable capital going forward and the putatively fragile US economy is looking alot less fragile based on some recent numbers. Perhaps, just perhaps, people are starting to feel that they can do better with their money in the typical alternatives to housing - cash, bonds and stocks which have been non-starters in recent years, wot with corporate scandals and sub 1% MM yields and all.
P.S. I have a stated in a few of the linked posts above what I think of the Euro's prospects. Guess who have been big buyers of US property Yup, Europeans. Will a $1.10 Euro curb this source of demand? Hmmm.
posted by Donny Baseball at 10:26 AM
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