More disruption today, as the U.S. tacked on some more tariffs on China. Between trade spats and political drama, it’s actually seems positive that the markets were only down a modest percentage. The Dow finished the day off 76 points to close at 25,656. The economy continues to look strong, and the markets keep showing support when stocks get sold too much.
Housing markets continue to experience a slowdown in growth. Zillow reported that Seattle has fallen from the number one spot for home price appreciation and now sits in 12th place. They noted that while home value growth has slowed in 20 of the largest 35 US housing markets, the median home value in the US is still up 8% year over year at $218,000. Zillow noted that rents are now rising at a slower pace falling from 1.6% growth to 0.5% growth. In the Seattle area Amazon just leased a 20-story office tower in Bellevue for 15 years and plans to staff it with 2,000 folks. The building is being vacated by Expedia which is moving to the old Amgen building and ramping up its workforce to 4,500 carbon units. (one carbon unit = one person = one car stuck in traffic).
Brian “Mr. Sunshine” Wesbury, chief economist at First Trust in Chicago and honorary member of the Westport Mafia, noted that Sales of previously-owned US homes fell 0.7% in July to a 5.34 million annual rate and are now down 1.5% from a year ago. The falloff was mostly due to a decline in sales of lower priced homes. Luxury sales continue to rise. Home inventories remain low and home values continue to rise but these trends might be starting to moderate as inventories appear to have bottomed while values are growing at a slower pace. It is important to note that existing home sales represent an asset transfer and do not have a material affect on GDP numbers.