Day 12 - Pent Up Demand

Retail sales are booming. Online sales have hit record highs.

The approximately 80% of Americans who are impacted the least severely by the recession are spending money on presents for others and on themselves. This is clearly an indication that the fear level is subsiding. Not gone, but subsiding.

Enter pent up demand. People are spending money on necessary and luxury items. Not foolishly, but as I like to say ‘they are shopping with their brains. not their wallets." Those days are long gone and lessons have been painfully learned. However, consumers are purchasing even though they are comparing prices and are bragging about where they bought things and how much of a discount they received. But they are buying and this is getting the economy and the money moving.

I believe that the two most interesting item in Diana Olick's ( CNBC) predictions for 2011 concern pent up demand. At some point, people who need to move will find a way to move and real estate transfers will happen. She indicates that "Right now housing starts are running near record lows and still falling, but builders believe pent up buyer-demand is coming. As banks begin to loosen credit to builders ever so slightly, they will jump at the opportunity to start new homes. They still have land, and the big builders especially will not want to be left without inventory when demand starts to bloom again." And, second, office and apartment segments will gain again.

People will always have to live somewhere, and I will always believe that dirt in our great country has great value. I've never seen it as challenged as it has been over the past three years, but every movement begins with the first step. My ear is to the ground.

Do you hear the footsteps?

Twelve drummers drumming.....