Economy Rebounding

Economy Rebounding

I just noticed on CNBC (12/12/2010 11:00AM) that they have reported that Apple and Nike stock is at the highest ever in their history.  Also, Exxon, Chevron and Verizon are all at 52 week highs.  The Dow is at 11,447.  I am not a financial analyst, but I have lived a while, through robust economic times and multiple recessions, so I at least have some perspective of the history through which I have lived.

The stock market appears to be doing well right now.  Of course, this is a volatile thing, and there is no telling what will happen tomorrow.  However, I have noticed that some people’s portfolios continue to post solid performance, or at least aren’t losing much, if any value, during the last year.

Once again, I am not trying to give any sort of counsel regarding buying or selling of stocks.  That is not the purpose of this post.  The purpose of this memo to clients and potential clients of mine is to alert them that what the Federal Government has indicated about the recession being over appears to be correct, at least based on what the stock market seems to be doing today, and for the last several months: steady, and with some companies doing very well.

What does this have to do with clients of a housing architect?  Well, we have been saying for months now that at some point the economy will be rebounding, based on information like the above improved and apparently steady stock market performance, the predictions of such housing market billionaires as Warren Buffett, and forecasts from such entities as Harvard’s business school.

Once again, so what?  Well, the so-what is that if you have been putting off having your dream residence designed and built because you have been waiting for the bottom of the housing recession, that appears to have actually occurred several months ago.  the nation’s economy seems to be improving a little bit each day.  That’s a good thing: easy does it.  That is a solid way for a solid economy to perform.  You really don’t want big fluctuations.  You want continue, slow, solid improvement.  That’s a sustainable performance.

So, what should you be doing, if you have been considering having your house designed and built?  What do you think?  How about starting on that right now?  Even if you start your architect today, it will be several weeks or possibly months before you will be ready to build.  How might the present improving economy impact that?  It seems likely that once other people who want to have their houses designed and built join you, there will be a lot of demand for new housing design and construction.  The basics of a demand-supply economy means that construction material prices, now at a low, will begin to go up in price.  Also, the labor contractors charge you to build your house will increase.  How much?  Hopefully not a lot, perhaps just a few percent.

But the longer you wait (“to make sure”) the more you will probably pay for that psychological feeling of ease.  Usually it is too late, once the majority of people feel totally comfortable making a particular investment.  The nice thing about a house is that it is a necessity.  You have to live somewhere.  The best investment you can make right now is in a nice house in which you intend to live as your main residence.  Why?  Because prices are at a multi-decade low, which occurred during the housing balloon bust a couple of years ago.

Due to America’s continued need for about 1.2 million new homes a year, the demand never stopped.  What happened was the abundance of having too many homes built, beyond America’s ability to absorb them, resulted in part in the bursting bubble of people building new homes merely for investment purposes.  This meant that there was a glut of homes waiting around to be bought.  And they have been bought, at least millions of them, at bargain basement prices and they are continuing to be bought.  I should know, my wife is one of the main real estate brokers at Keller Williams around here.  The bargains will not last forever; they are selling swiftly and in some price categories, like the extremely cheap, they are almost gone.

This means that new houses will need to be built once the overstocked inventories are bought.  Don’t get caught waiting until it is too late.  Contact your house architect now and have him or her begin designing your dream residence now!