But “there’s just another group of Americans who are still struggling, who can’t access the credit because we’ve raised credit standards, and you have high unemployment. I just think those two trends, at some point, have to collide.”
It’s the now well-established phenomenon of the “K-shaped recovery,” where one part is doing well, and the other part is getting crushed.
Or as WOLF STREET commenter IdahoPotato called it vastly more accurately and unforgettably, the “FU-shaped recovery.” Meaning, people who got bailed out and enriched by the Fed’s $3 trillion that it threw at the markets to inflate the prices of stocks, bonds, housing, etc. are now happy as a lark, and to heck with the rest of the people that are getting crushed.
But this craziness in the housing market is not sustainable. The National Association of Realtors reported yesterday that sales of existing homes – single-family houses, condos, and co-ops – surged in September by 9.4% from August and by 20.9% from a year ago to a seasonally-adjusted annual rate of 6.54 million homes, the highest since 2006 (data via YCharts).
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“The uncertainty about when the pandemic will end coupled with the ability to work from home appears to have boosted sales in summer resort regions, including Lake Tahoe, mid-Atlantic beaches (Rehoboth Beach, Myrtle Beach), and the Jersey shore areas,” the report said.
I have heard similar stories from real-estate brokers, such as red-hot demand in very pricy Carmel-by-the Sea, in California, about 76 miles south from San Jose and 116 miles south from San Francisco. The demand is said to be particularly hot for homes in the $2-million-plus range.
But here is what I also heard: People bought their new home without first selling their old home. They still have their place in San Francisco, or wherever, and will eventually put it on the market, but meanwhile they plowed a few million bucks into a house in Carmel and moved. These stories are everywhere.
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