Profimex Market Review Update – January 5, 2021
The US Economy Struggles as Asia Rebounds
Mark Zandi, chief economist for Moody’s Analytics, believes that the US economy could slip back into a recession, as it continues to struggle through the winter wave of surging number of corona cases. “The surging pandemic, the intensification of infections, hospitalizations, deaths, is doing some damage, some real damage to the economy at this point. And I think I would go so far as to say that the economy is at risk of backtracking here, going back into recession.” An indicator for the weak state of the economy are the 853,000 new unemployment claims in December only. However, there are reasons for optimism with the congress passing a new stimulus bill, and vaccines being distributed.
Home prices are rising faster in the middle of the U.S. as Covid drives people away from coasts
In the past, home prices in large coastal cities were those that rose the fastest in the U.S. because of the limited supply and greater demand. The pandemic, however, brought this trend to a halt. Today, smaller metropolitan markets, such as Pittsburgh, Cleveland, Cincinnati, Indianapolis, Kansas City, Boise, Idaho, Austin, Texas, and Memphis, are those that present the fastest growing home prices. Home prices in those markets increased 10% + year-over-year. The relatively larger supply of homes in those markets makes the strong increase even more significant.