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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (17866)	4/5/2002 1:26:25 PM
From: AC Flyer	Read Replies (1) \| Respond to of 74559

Good article. Illustrates why the doomsters' worst case economic scenario will not come to pass in this decade, imho: 1) Demographics: BUYERS ABOUND. A big reason for the optimism is demographics. The 2000 Census suggests that household formation ran about an average of 1.25 million annually during the 1990s. Household growth likely will average 1.23 million a year over the coming decade, estimates Economy.com. This is true but misses a couple of key factors - the Boomers' trade-up and vacation home buying. 2) Productivity The U.S. may even be able to do better than that, considering the giant strides companies are making in hiking their efficiency. If workers continue to pocket much of the gain from the added output created by the New Economy, then much of that money could find its way into the housing market (see BW Cover Story, 4/1/02, "Retating the '90s"). 3) Real Income Gains MORE TO SPEND. A number of factors affect home prices, but over time price appreciation largely tracks the growth in household personal income. Workers' wages and compensation should continue rising smartly. Personal income per household should climb over the coming decade at a real 2% average annual rate (4% nominal), assuming the economy's noninflationary growth potential is around 3%.

To: elmatador who wrote (17866)	4/5/2002 7:45:14 PM
From: TobagoJack	Read Replies (2) \| Respond to of 74559

Hi Elmat, A HK-based UK friend just got an order for 2 mm thermostat, at USD 1.25 net margin a piece, for the US from China, with warmth. Yup, spending on home is strong. My mom's house in the Bay Area was bought in 1986, is the biggest in an old (circa 1930s?) neighborhood with big trees, built on 2 contiguous corner lots with large yard. The squeezed-in neighbor's small single-lot house just got off-loaded at 5 times my mom's purchase price. Son is thinking financial engineering, as in maybe perhaps mom would like to move in with aunt in Santa Barbara or uncle in Carmel and liberate equity for financing grandchildren creation <g>. In any case, strange non-recession, bubbles within bubbles, surrounded by foam and fizz, all awaiting popping and cleansing still, obvious to the most casual of passing observers at 6,000 miles distance. Chugs, Jay

To: elmatador who wrote (17866)	4/6/2002 7:56:33 AM
From: mcg404	Read Replies (1) \| Respond to of 74559

<<re: In America, Home Isn't Just Shelter Americans have demonstrated that when it comes to spending their hard-earned cash, a home and all the stuff that goes into it -- from furniture to windows to stoves -- tops the list.>> I'd agree with this statement with one minor adjustment: we change "hard-earned cash" to "borrowed money". Funny how the american consumer can hold the following beliefs: higher food costs - bad higher clothing costs - bad higher energy costs - bad higher housing costs - good Fails to make sense if owning a home is viewed as one aspect of fulfilling basic needs. But it works if the underlying motive for "ownership" is real estate speculation. Just another example of the endless belief in the free lunch and great fool theories?