St Cloud Real Estate Could Benefit From Fridays Shocks

Dated: 01/09/2019

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Last week ended with a quadruple-barreled blast of good news that bolstered prospects for St. Cloud real estate—an effect magnified by how unexpected all had been.

When times are good, St. Cloud real estate can’t help but benefit. That may seem to be so obvious that it doesn’t even need to be said, but a close cousin is arguably even more important: When people feel times are good, St. Cloud real estate benefits.

Friday’s positives were magnified by the contrast with what had been reported in earlier days. Although the holiday-shortened week had seen evidence of strong holiday sales, that was dampened by a grab-bag of alarming developments: government shutdown; China trade standoff; Apple sales losses... This meant that Friday’s raft of unexpected good news made for commentators who were, by day’s end, all but giddy.

First came reports of shockingly good U.S. economic performance. Wages in December “surged” (the Wall Street Journal). The annual wage gain of 3.2% “matched the fastest pace since 2009” (Bloomberg)—a trend that was accelerating (3.5% in December).

That wasn’t all. Not only were wages rising—jobs were, too. Employers had “shattered forecasts” (MarketWatch) by adding 140,000 more jobs than had been predicted. It “underlined that the American economy remains strong despite market turbulence” (CNN Business). Even an incremental rise in the jobless rate was greeted as welcome news—it meant that more workers were actively seeking work. Discouraged by bleak prospects, they’d been sitting on the sidelines for years.

The Journal greeted the wage jump evidence as proof that the economy “maintained strong momentum…even as financial markets sank.” But by day’s end, even that “financial market” gloom was banished as the Dow “roared back…in the fourth-biggest point increase of all time” (CNN). It finished a surge of 8% since Christmas Eve.

That final market push was probably triggered by the centerpiece (where St. Cloud real estate prospects are concerned): a turnaround in the Federal Reserve’s positioning. Although good economic news almost invariably causes regulators to chart interest rate raises, the Fed Chairman’s message on Friday “was that the Fed can afford to watch and wait” (New York Times)—rather than remain committed to its previous plans for two hikes in 2019.

In addition to good economic times, a continuation of historically low interest rates could make 2019 a most welcome setting for buying and selling St. Cloud real estate. I hope it’s a year you’ll give me a call!

     

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Noel Johnson

Passion for investing in real estate brought me to create Premier Real Estate Services in 2002. Ten years of purchasing & managing several rental properties, while assisting friends & clients with bot....

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