Thursday, March 12, 2009
Tidbits of Good News
Good news in the news in the last couple days.
First, home sales are way up in the Land of Arnold. Twice as many California homes sold in Jan. '09 as did in Jan. '08. Of course, the median home price dropped 40% year-over-year. But isn't that good for the buyers?
What's even better is that the inventory of homes plummeted from a 16.6 month supply to a 6.7 month supply. A shorter supply may lead to price increases. Time will tell. Read the article here at IBD.
Of course real estate is local and just because prices may be nearing a bottom in La La Land doesn't mean it's necessarily a bottom for the rest of us. BUT, if the Left Coast is bottoming out, the rest of the country will follow and will probably end up hitting a bottom that's no worse than California's. The most recent Case Shiller Report puts L.A. at 37.5% off it's Nov. '05 all-time peak. That's Dec. '08 data. If this does end up being the bottom in L.A., look for the rest of the country to follow in the next year or so. Of course a bottom is one thing and a rebound is another.
The other bit of good news is that the Baltic Dry Index seems to have bottomed. This index tracks the cost of transporting dry goods such as coal, cement, ore, and grain by ship. The higher the index, the greater the demand for shipping. A Baltic Dry Index on the rise means that credit must be flowing and countries are trading. A good thing. Read about it here.