Heyy…Happy Days Are Here Again!
Should we be singing “Happy Days Are Here Again?” or is it too soon to break out the champagne and noisemakers?
The media has been aflutter with positive economic news, but will the momentum keep going? No one really can say for sure, but one can make an educated guess based on the realities of today’s economic news.
On June 25, 2013 a University of Florida survey reported those living in the Sunshine State were feeling pretty good about the economy with consumer confidence up another point in May to another post-recession high.
“The last time perception of current buying conditions reached this level was April of 2007,” eight months before the Great Recession officially started, said Chris McCarty, the director of UF’s Survey Research Center in the Bureau of Economic and Business Research.
The survey takes a long look at how Floridians’ feel about their own finances, economic conditions, in the coming year. A long-term view of the nation’s economic health and whether now is a good time to buy big ticket items, like a home.
One of the bigger concerns amongst Floridians, notes McCarthy, is that interest rates will go up being as that the Federal Gov’t has said it might pull back on the amount of Treasury bonds and mortgage-backed securities it has been buying to fuel the economic engines.
In addition to higher mortgage rates, higher home prices are being seen across South Florida. The Standard & Poor’s/Case-Shiller home price index for Palm Beach, Broward and Miami-Dade counties grew 13 percent in April from the same time a year ago. So, despite higher interest rates, people are still dipping their toes into the housing market.
The sale of new homes also continues to rise. That may prove to be even better news because demand for new homes means that someone has to be building them and that will put a whole lot of people who have been unemployed – contractors, architects, plumbers, electricians, etc. — back to work.
It also means other areas will see gains including those who sell furniture, window coverings, flooring, lighting, etc. That, in turn, will put money in their pockets and allow them to start spending again, which in turn will help to improve the economy more so.
Yet, we haven’t seen that happen. The Commerce Department just reported that the U.S. economy hasn’t grown as quickly as expected in the first quarter, mostly because jittery Americans remain hesitant to open their purse strings too much.
Of course, the recession didn’t happen overnight, so neither will the recovery. Let’s face it, it’s been a long haul and there are many more steps to take before we can feel confident we are on the right path. Suffice it to say that those whose job it is to keep an eye on these signs of recovery are keeping the champagne on ice for now.
Real estate attorney and foreclosure defense attorney, Roy Oppenheim left Wall Street for Main Street, foundingOppenheim Law along with his wife Ellen in 1989 in Fort Lauderdale, Florida, and is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at @OpLaw or like Oppenheimlau.com on Facebook.