No Housing Bubble, Homes Sales in August, Black Friday
November 20, 2015
Friday – November 20
The San Francisco Federal Reserve Bank reported this week that it doesn’t see another housing bubble forming. In its findings, the bank said that home prices have rebounded and are nearly back to the pre-recession peak. The bank said, “However, conditions in the latest boom appear far less precarious than those in the previous episode. The current run-up exhibits a less-pronounced increase in the house price-to-rent ratio and an outright decline in the household mortgage debt-to-income ratio—a pattern that is not suggestive of a credit-fueled bubble.”
Research firm CoreLogic reported this week that cash sales accounted for 31.7% of total home sales in August, down from 34.9% in the same month last year. August rose 0.8% from July. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%. According to CoreLogic’s report, the cash sales share typically increases month over month in August due to seasonality in the housing market. CoreLogic does see cash sales to return to pre-recession levels in 2017.
Black Friday deals will be coming early this year and could start as early as this weekend. A spokesperson for BlackFriday.com says deals are spread out over a longer time period this year. Amazon, Best Buy and Costco have already begun to roll out deals, but the “doorbuster” prices will be reserved for Thanksgiving night and Friday. Black Friday is the day after Thanksgiving in the United States. Retailers generally see an upward spike in sales and consider this to be the start of the holiday shopping season. It’s common for retailers to offer special promotions and to open early to draw in customers.
