Real Estate in Northeast Florida and Around the World

The new home sales for July was just announced as having exceeded analysts' expectations.  Have you noticed this trend of surprises? From Wall Street company earnings' reports to industry reports, the results are beating the so-called experts expectations.  Why is this?

While the answer to that may lie in the same neighborhood of the crystal ball that we would all like to possess, there are a few reasons why the good news of late seems to be catching our experts on Wall Street, but not on Main Street, off guard. 

Perhaps those "experts" are out of touch with Main Street.  Wouldn't be the first time.  As a Realtor, I regularly talk with my friends and neighbors about their business - has activity increased in the last few days, weeks, months?  Where do you see your business coming from?  Who is doing the shopping and what do they want?  The answer I get more often than not is that since mid-second quarter, the level of business has consistently been improving.  From my restauranteer customers to the site agents in new neighborhoods, to the local dry cleaner to my pedicurist - they are all seeing signs of the increase in customer spending.  Is is significant?  No - but it is steady. Is it a surprise to me?  No, because I talk to the people who are first hand impacted.  And my business?  People are feeling better about the economy, and are loosening the wallets.  How's my real estate business?  Steady, although much of my business is driven by first-time home buyers wanting to take advantage of the tax credit. 

Where does that tax credit money go?  Many "experts" said it would not go to stimulate the economy, but would sit in savings accounts or used to pay off old debt.  My customers do plan on banking some of the money - but for expenses they forsee down the road within the next 12 - 18 months - a new roof, new carpeting, kitchen update - all things that stimulate the economy.  But most of them have plans to use the money to buy things that homeowners buy - lawn mowers, vacuum cleaners, washers and dryers and so forth.  Furniture that they didn't need before because there was no space and now there is.  Fencing for the backyard. Towels and rugs for the extra bedroom. You get the picture.  It may not be a lot of money per purchase, but the more new homeowners that are out there buying, the economy begins to feel it in a positive way.

All of the new home sales will also provide stimulus - even with no tax credit because of the jobs that were needed in building the homes.  The materials needed, from the framing materials to the tile to the window blinds and appliances.  Landscaping companies benefit, as do the electricians and plumbers. 

It is a full circle of life for the economy that the housing market stimulates.  Our legislators need to get on the stick and extend the tax credit for first time homebuyers, and yes, perhaps to a smaller extent, for move up buyers.  Housing plays a significant part in healing our economy, and you don't need a clunker to participate.

See ya around the neighborhood!