Big drops not good for consumer confidence
There I was today driving back to Jupiter from an early morning showing in Palm Beach and the phone rang. There was a voice of terror on the other line “the Dow is down over 500 points at the open”. Not great news and I did not get much further up the road before the phone rang again “now it’s down over 1,000”. Panic type stuff and brings back memories of 2008. But even then the biggest 1 day crash was 777 points.
The Dow dropped over 33% in 2008 and since then it has been a 6 year bull market that no doubt has been bullish for real estate. Single family homes in the Northern Palm Beaches had their biggest one year loss in 2008 and the fear rolled over into 2009 which were the two worst years for median single family home price ever in the area. Down 19% one year, down 12% the next and much of it was fear in the economy coupled with the loss of wealth.
The market has recovered since that opening drop today but the reality of a big, immediate, correction made everybody stand up and take notice. All signs had been pointing to a very strong bull market continuing through the season here for property in Jupiter and the surrounding area. But over the past few days one can see that nothing is a sure deal. Median prices of single family homes are up so far this year for the 5th time in a six year stretch. But the stock market was our friend. If it turns into a foe be careful.