More Positives …Housing…we are not kidding !!

In light of our prior post of 17 out of 18 articles being negative in our local business section, we wanted to comment on the latest Case Shiller release of housing prices. This lagging index (by design this index uses delayed data for accuracy purposes, thereby resulting in a lagging of data) is currently giving clear signals that housing has finally lifted itself from the doldrums. Do not get us wrong, we are not saying it is off to the races, but when our slow dog begins getting his legs under himself, he is no longer a drag on the economy and may be an addition sooner rather than later.

Here is the Nov 27, 2012 chart:

You immediately notice that we are way off the top and finally off the bottom (reversion to the mean..a topic for another time) but it looks like after a head fake or two, our housing dog is no longer floundering.

Why is this important?

At near peak growth in housing, (yes this was overheated at the time, but bear with me) this sector contributed almost 20% to GDP. In Q42011 that number fell to less than 15% according to NAHB report, getting to that level was a huge drag on our total GDP.

One can easily infer a stronger housing sector may add jobs, increase optimism, and partially offset any fiscal cliff issues that may come from beaurocratic gridlock.

If this does in fact pan out, we will give Big Ben his due as we have been VERY skeptical of his continued “Juice is Loose” money fire hydrant!

We hope you enjoyed another positive amongst a recent world of negatives !

Have a Great Day!

JK

PS This is no recommendation to go buy a second home, there are still dragons out there in specific parts of the country…but they are smaller dragons, never the less!

214-706-4300
http://www.jkfinancialinc.com
8222 Douglas Ave # 590
Dallas, TX 75225

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