wealth effect

Coronavirus and the Housing Market

Lower Interest Rates vs. Economic Uncertainty How will coronavirus affect the housing market? The answer likely depends on two questions: 1) which Buyers?; and 2) which segment(s) of the housing market — specifically, which price points? So, at the lower end of the market, especially in the Twin Cities, there remains an acute shortage of...
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How Will Rocky Stock Market Affect Housing?

All Eyes on the Fed How will rocky stocks — down another 2% in early trading today — affect the housing market? My knee-jerk response is to cite Chinese leader Mao Zedong, who, when asked (in 1950), “What’s the significance of the French Revolution?,” responded, “it’s too soon too tell.” So, if stocks quickly rebound in the...
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Dow Jones 25,000 (Almost), Tax Reform, and the Housing Market

Balance Sheet vs. Income Statement Effects “It’s too soon to tell.” –Chinese premier Mao Zedong in the late 1940’s, when he was asked what he thought about The French Revolution. I know what Mao Zedong would have said about the gargantuan, $1.3 trillion tax reform bill just passed by the Republicans (zero Democrats voted in...
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Brexit’s Effect(s) on the U.S., Twin Cities Housing Market

(Even) Lower Interest Rates vs. Weaker Economy “It’s too soon to tell.” –Chinese leader Mao Tse-tung, when asked — in 1948(!) — about the historical significance of the French Revolution. To accurately assess the potential effect of Brexit on the housing market, one must first identify and analyze the biggest variables. Here’s my take: Positives...
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August, 2015 Housing Market: Macro Variables > Micro?

China’s Chickens Come Home to Roost** or, Is the Opposite of the “Wealth Effect” the “Poverty Effect??” Normally, I tell prospective home Buyers and Sellers to tune out “macro” factors like the broader economy, (un)employment, etc. and instead focus on “micro” factors affecting the specific property they want to buy or sell. So, forget about...
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Bubble Dynamics: Greed Effect > Wealth Effect

Vertiginous Stocks “Dear Jack:  Don’t buy a single vote more than is necessary. I’ll be damned if I’m going to pay for a landslide.” —JFK quoting a made-up telegram from his father, Joseph Kennedy, after he first won election to Congress. Here’s a thought:  overdoing the stimulus — and rocketing stocks higher — can backfire, blunting (or worse)...
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