Latest from the Blog
- Making sense of wacky economic data
The Consumer Price Index, CPI increased 0.9% in April, which was the most significant monthly increase since April 1982. If we had this rate of inflation for all of 2021, it would amount to a rate of inflation of 10.8% annually. The experts forecast a 0.2% rate, so why was inflation so high in April?
There are a few reasons why.
1) During the COVID pandemic of 2020, many people saved money because of economic uncertainty. Many people spent less money commuting to work, dining out, vacations, clothing, cosmetics, and medical care. This money went into savings is now being used because of pent-up demand for products and services. 2) Stimulus money was used by consumers and added extra purchasing power for consumers. 3) The housing market has been on a tear creating a significant demand for durable goods and services. 4) The national average hourly wage rose 20 cents in April to $25.45. Business competition for workers puts upward pressure on wages. 4) The monetary policy from the FMOC (Federal Open Market Committee) in the past has targeted inflation at 2%.
The inflation rate for the last eight years has been under the target 2% rate. The FMOC policy has shifted to target a higher inflation rate to compensate for the lower inflation rate of previous years. 5) Inflation was almost non-existent for the first half of last year. Compared to last year, with a shallow base level of inflation, any increase will seem exaggerated.
In summary, although the rate of inflation may seem higher than usual in April, forces will help return it closer to the FMOC target rate of slightly more than 2% annually. The stimulus payments will end in September, reducing the money supply and reducing inflationary pressure. The funds saved last year will be used this year for purchases. Schools and daycare will open in September, allowing more workers to enter the workforce. When more workers enter the workforce, there is downward pressure on wages. Mortgage rates should continue to be historically low in the 3-3.5% rate for a 30 year fixed rate mortgage in 2021. If you are thinking of buying or selling a home in Sarasota or Manatee County, please call me today at 941-799-9440.
- Why Are Home Prices Rising So Fast
It has been my pleasure to help many of you buy and sell homes in the past 19+ years. I’m going to ask your help today in referring anyone you may know who is looking to sell their property in Sarasota or Manatee Counties. The local market is so hot that we have only a 20 day supply of homes where we traditionally have a 180 day supply. Check out the local housing market data.
There are many factors responsible for the housing inventory shortage, listed below are the top five:
1) New home builders can not keep up with demand because of labor and material shortages, putting a strain on the home resale market.
2) Computer chip shortages are affecting the delivery time of major home appliances for new home builders. This supply shortage is reducing available inventory.
3) Historically, low-interest rates have motivated many would-be renters to decide to purchase a home. The interest rates have helped create more buyers than available homes for sale.
4) A population shift due to COVID-19 where many people can now work from home. If you can work from home, why not live in sunny Florida?
5) Retiring Baby boomers leaving the high cost of Northern urban areas for a more affordable cost of living.
Now may be a perfect time for someone you know to either upsize or downsize the home they are currently living in. I would be available for a free home value consultation to discuss a possible sale. Please use the contact me form or call (941-799-9440. Thank you for the opportunity to help with your real estate needs.
- Little Home Wreckers!
Florida has four cities in the top ten worst areas for termites nationally, according to Orkin.: Miami (1), Tampa (3), West Palm Beach (6), and Orlando (9). Protect your home or your future home (home buyers) by getting a termite inspection from a reputable company. Please contact Ed Curry at 941-799-9440 if you are thinking of selling or purchasing a home.
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