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Business Conditions Monthly, Dec. 2016 Vol. 3 Issue 12

Business Conditions Monthly, Dec. 2016 Vol. 3 Issue 12

Posted by John McGuirt on Jan 3, 2017 4:55 pm

I applaud AIER for coming right out and saying, "The improvement in consumer expectations has been linked to the presidential election, ...".  It will probably take some time, however, to determine just what those links are and how much impact they actually have.  From my observations in SC, the biggest change I'm seeing is the notoriously intangible "attitude change", basically summed up as "optimism".

The surge in the stock market since the election is not news to AIER members.  The thing that has impressed me here is the surge in real estate sales.  My mother has four properties under contract since the election.  This follows over a one year period of no sales.  Her prices did not change.  Interest rates went up, but that may not be relavent, since all of her buyers are cash buyers.  Nothing major happened in her area, such as a new manufacturing plant moving in.  The properties consist of lake resort lots, a subdivision lot, and a timber tract.  The only apparent thing that changed is the prospect of new policies coming out of Washington, DC.

I would be curious to know if other members are encountering high levels of optimism in their areas.

Re: Business Conditions Monthly, Dec. 2016 Vol. 3 Issue 12

Posted by Katy Delay on Jan 4, 2017 12:26 pm

I have noted such real estate booms elsewhere, notably in Los Angeles where prices have gone up double digits and have exceeded their previous highs, and in ski resort areas like Utah where building continues at a fevered pitch in spite of high inventory.  Personally, and without any scientific evidence, I am chalking this up to another bubble.  The same exact thing happened in the approach to the 2006-7 crisis.  And I am experiencing about the same queeziness now as I did back then, too.  (Once again, not at all scientific, this "queeziness.")