Economic Extremes & Consumer Shock
By Rick Tobin
None of us have ever seen such wideranging extremes of economic and asset trends as we ’ ve seen over the past few years . In many ways , it ’ s like we ’ re on a giant yoyo , swinging wildly from side to side or on a bumpy roller coaster ride with wicked twists and turns that keeps moving onward for years at a time — instead of over just a minute or two .
All of the economic jerking that we feel on a daily basis can be overwhelming . Some days we see very positive news , which gives us hope for a bright future . Other days , the gloomy negative news can seem a bit shocking because much of these positive and negative economic data trends have never been experienced in past years or decades .
Let ’ s review some of the key economic data trends that swing from very bad to very good ( or vice versa ) in hours , days , weeks , months , or over the past few years :
purchases fell the most on record in the 4th quarter of 2022 at a whopping 46 % decline pace . Home prices fell for six months in a row since peaking in July 2022 through the end of January 2023 , according to the CaseShiller U . S . National Home Price Index .
A booming home price example : A young family purchases a new starter home for $ 300,000 in January 2020 shortly before the global pandemic designation . That same home would ’ ve peaked at $ 435,000 in the summer of 2022 using the same CaseShiller data trends . If so , the family gained $ 135,000 in newfound equity in just 18 months or so .
The most horrific housing crash in U . S . history took place between the market peak in 2006 and 2012 when the national housing average fell 27 %. California ’ s home losses were much more extreme with the peak to trough bubble burst falling as much as 41 %.
Between 2019 and peak prices near the summer of 2022 , many regions had home appreciation percentages of somewhere between massive 50 % and 100 %+ gains . Future home losses will need to be significant and the worst ever in national history to turn recent home purchases negative .
For people who ’ ve owned their homes for many years or decades , they will be more likely to ride out any significant price drops in the future . However , buyers who purchased with anywhere between 0 % and 5 % down in recent years may soon go underwater with the mortgage debt surpassing the market value .
Yearoveryear home sales fell between 37 % and 47 % in Southern California counties through January . As sales volume declines , home price drops tend to follow even if most sellers aren ’ t willing to do it at first because they want peak record high prices like last seen in 2022 .
Fewer buyers means less competition for quality properties and may lead to home listing price cuts and increased closing cost credits from sellers to buyers .
Home Price Changes
Nationally , home prices have risen consistently since 2011 . Investor home
64