A good barometer of the luxury markets is LVMH where overall revenues rose 19% in the second quarter, mostly fueled by Europe (with a strong dollar and lots of tourists) and the US. Growth was down from 23% in the first quarter. Most notably, LVMH profits rose by 34% in the first half which clearly demonstrates how many companies are charging much, much higher prices than their higher costs fueled by overall inflation.......because their audience is willing to pay the prices....and has the money to pay them.
CoreLogic's home price index shows US home prices were up over 19% in the past 12 months.....on average....which varies from place to place. Anyone thinking that level of escalation keeps going forever has to be nuts!
Lumber Price Insanity? Before 2018, the all-time high in the lumber futures market was in 1993 at $493.50 per 1,000 board feet. By May 2020, the price reached a record $1,711.20 high (still the all-time peak). After falling to $488 5 short months later, in August 2021, lumber futures took off on the upside, rising to $1,477.40. Today it's trading closer to $550.....down over 62% in 4 short months.
In the US natural gas costs about $9.10......in Europe that cost has soared past $60 as Russia cut supply. This is almost certain to cause a recession in Europe.....which could impact global GDP and many US companies reliant on Europe. A stronger dollar could be harmful to US companies selling goods too. While heating homes and cooking are impacted, most industry needs power which will impact production and production costs. Becoming reliant on tyrants is never a good idea!
Resort 'fees' at hotels? Yup, shockingly we are used to paying a 'fee' to use many amenities at many hotels around the globe. Now these extra 'fees' are being charged to car owners (BMW started charging owners a monthly 'fee' to use their heated seats and steering wheels)......and apartment buildings are charging additional fees to RENTERS to use certain amenities in their buildings..... maybe we should charge additional fees for making beds in our messier listings? (WSJ)
A CNBC FED survey estimates a 75 basis points rate hike this week with a terminal rate at 3.83% by March 2023.......BUT.....then it estimates that rate will be DROPPED by the end of 2024 to about 2.85%....almost a 100 basis points drop. This is critically important to factor in when obtaining a mortgage: getting an adjustable rate shorter term mortgage now with the plans of refinancing in a few years may be wisest... Yes, prices may come down a bit, but when the economic recovery happens (combined with lower building due to economic pullback) you could expect prices to SOAR again... (CNBC)
China property sales are estimated to drop 30% over the next year. In the UK they were down 13% in May. It's amazing how global most issues are! Inflation is high in energy powerhouse Canada (8.1%), Europe (8.6%), the UK (9.4%), and even Australia (6.1%). France - a nuclear energy powerhouse producing 70% of its energy needs - has inflation of around 5.8%.
Energy efficient homes, like those with solar panels, fetch, on average, a premium of over 17% in Australia – though that figure grows to 28.9% in Queensland and 24% in Victoria. (PV Magazine)