The DOW Gains Nearly 1,400 Points!

By
Real Estate Agent with Preview Properties Skagit LLC

Make no mistake!  The economic recovery is well underway in this country!

From March 2nd, 2009 through April 22nd, 2009 the Dow Jones Industrial Average (the DOW) has gained a whopping 1,395 points.  Not bad for less than 8 weeks!

It certainly has been a rough 12 months that has affected the entire nation.  Just a year ago, the DOW was around 13,000 points.  An incredible amount of wealth in this country has been lost over the last year.  I'm not losing sight of that.  However; a recovery or rebound is clearly visible. 

On March 2nd, 2009 the DOW was at 6,626 points compared with the 8,021 points during today's trading just a few minutes ago.

It is time to get going with the American Dream again!  Invest in a house, buy some stock, get yourself or your family a nice car or something.  The bargains out there are amazing. 

The news reports are still mixed.  There are still many good signs as well as bad, but like all of the other recessions America has ever faced, this recession will end.

This is America!  It is time for our people to remember that!

Chart from MSN's Money Central. Click here for their current chart.

Data/Chart Source: MSN Money Central. Click here for the current chart.

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Rainer
178,939
Mark MacKenzie
Phoenix, AZ

Hi Bill,

I do believe that all recession come to and end, and I would never bet against America, I do think however that this recession has yet to run its course.

Additionally, this recent rally while positive, is being driven by traders.  I no longer look at the stock market as an economic indicator.

April 22, 2009 05:15 PM #3
Rainmaker
1,086,451
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

Bill, All I know is that my market of Poinciana is one of the worst in the country with values down over 70% inn  the last 24 months BUT we had the most resale closing in March EVER!!! And inventory is down 30% in the last 90 days. The market has certainly started to make a turn for the better in Poinciana Florida.

April 22, 2009 05:16 PM #4
Rainmaker
558,659
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Bill -- Recessions come and go, and this one, while certainly a doozy, will surely pass and good times will come again.  Business cycles can be brutal.  I listened to an interview with George Soros the other day, fascinating take on the markets if left to their own devices, will always go to excesses.

April 22, 2009 05:17 PM #5
Rainmaker
92,803
Bill Sauneuf
Preview Properties Skagit LLC - Mount Vernon, WA

Sue, The spending, buying, trading stocks, and increased home sales have a lot to do with the last two months of positive growth.  Some of the banks are returning the TARP money. Ford was offered it and didn't take it. Real estate sales are up.  Banks seem to have figured out how to turn a profit again.  I don't see any quick fix, but looking back at the last two months has certainly demonstrated strong economic growth.  That is a recovery.  Only time will tell if it keeps going or falters.  It takes grass roots spending and consumer confidenct to create the recovery.  I believe its happening.  As more people get on board with that idea, the recovery can take off.

Sandy, me too...

Mark, the DOW is one of the world's best economic indicators.  I don't think ignoring it could possibly be a good idea.

Bryant, I feel for Florida, California, Nevada and Arizona, the 4 worst hit States.  The last couple years has been brutal.  My parents are in California, so I feel the pain.  I'm glad there is recovery going on in Florida.

Chris, Boom or Bust.... Mostly it is all just consumer confidence choices about whether or not to spend money on a big scale.  I hope and believe that we've hit bottom.  It is certainly going to be a bumpy ride for a bit, but I think it will continue to move up.

April 22, 2009 05:55 PM #6
Ambassador
1,427,131
Anna Banana Kruchten
Phoenix Property Shoppe - Phoenix, AZ
Phoenix Real Estate Agent, CRB, CRS 602-380-4886

Bill I am with you on this one.  It will turn around......obvioulsy not right away but there is something to be said for the American spirit andcreativity.  Perception is most of the game.

April 22, 2009 07:09 PM #7
Rainmaker
92,803
Bill Sauneuf
Preview Properties Skagit LLC - Mount Vernon, WA

Anna, The road to recovery is certainly going to be a challenging road filled with pot-holes.  It looks to me like the worst is over.  I hope that I'm right.  Just looking at the last two months, you'd think the economy and the world were in great shape.  The only question is: "Will this upward trend continue?"  If it does, the recession is about over...  I don't know how long it will take to get back to where we were a year ago, but just having things slowly get better is a huge victory for us all. 

April 22, 2009 08:51 PM #8
Rainmaker
1,621,737
Dorie Dillard
Coldwell Banker United Realtors - Austin, TX
Realtor-Canyon Creek- NW, Austin TX Homes For Sale

Bill,

You are right when you say the road to recovery is going to be a challenging road and filled with pot-holes. i believe we have hit bottom but lets not spend our way out of it!

April 22, 2009 09:12 PM #9
Ambassador
966,757
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Bill - Thanks for the perspective.  I don't pay a lot of attention to the Dow these days, and I didn't realize it had jumped that much lately.  I do know that we have more contracts in place in my office than we have had in years, and for that I am thankful.

April 22, 2009 09:46 PM #10
Ambassador
600,224
Roland Woodworth
Keller Williams Realty - Clarksville, TN
Short Sale and Foreclosure Resource- SFR - Clarksv

It's good to see the DOW is in a recovery mode.... I don't follow it on a regular basis..

April 22, 2009 11:43 PM #12
Anonymous
Anonymous
Joe Scaperotta

I still think alot you are living in a dream world. The economy isnt turning around and is in fact getting worse. We will see increased layoffs, businesses  folding and more foreclosures. It will take at least another five years until we being to come out of this if then.

April 22, 2009 11:44 PM #13
Rainmaker
1,332,051
Vickie Nagy
Vickie Nagy, Broker Associate Realty ONE Group BMC Associates | BRE#01363932 - San Ramon, CA
Broker for San Ramon, Danville, Dublin, Pleasanton

I don't know about the DOW, but I do know that buyers are out in force seeking new homes while inventory is still relatively high and rates are almost historically low.

April 23, 2009 12:15 AM #14
Rainmaker
264,571
Eric Martell
RE/MAX Properties SW, Inc. - Orlando, FL
Ph.D.

The stock market usually leads the housing market out of a recession, so, if it is going up, then that's good news.  Most of the stock pundits I read seem to feel that this is a bear market rally and not destined to last.  Sorry to dampen the enthusiasm.  I guess time will tell.

Many smaller banks have always remained profitable.  Many of the large banks are now showing profits and look good, unless you're somewhat suspicious and wonder why their source of income hasn't really changed enough to justify the profit without showing the TARP funds as part of it.  I'm just saying...

As for the real estate market, in our area we're seeing low priced REO properties which represent about 30% of the listings converting into about 60% of the sales.  The problem is that the shadow inventory of REO properties which the banks are witholding from the market is larger than the number of properties which they have listed.  This means that it'll take a long time for the REO properties to be absorbed. The median price point should stay down until the REO level decreases. 

So, what's that mean?  Buyer's agents should do ok and well-qualified REO buyers will do ok, particularly as long as the mortgage rates stay low.  The ones who will be hurting are the people who are making their payments on time on a property which is upside down and who can't get mortgage relief for one reason or another.  They will probably have to wait a long time for their value to recover enough for them to sell without bringing money to the table.  That's bad news if you're responsible and are forced to move.

April 23, 2009 07:22 AM #15
Rainmaker
96,792
Kathleen Garvey
Coldwell Banker - Denver, CO
Denver's Neighborhood Expert - Listings & Sales

Obviously......you are not a financial chartist. 

April 23, 2009 08:57 AM #16
Rainmaker
152,098
Kathy Knight
Intracoastal Realty Corp - Wilmington, NC
BROKER, ABR, CRS, GRI, SFR, Wilmington NC Homes and Beach Homes

Love your very upbeat blog.  Yeahhh.... market is showing signs of recovery!!

April 23, 2009 09:22 AM #17
Anonymous
Anonymous
Anonymous

Historically the Dow tests the botton several times before it starts up for good. That has not happened in the current recession. There also may be problems down the road with inflation caused by so much borrowing. With the Chinese holding so much of our debt, all they have to do is stop lending and the interest rates will skyrocket. Course if that were to happen, the consumer would stop buying and the problems with them sending us toxic stuff would dissappear.

April 23, 2009 10:00 AM #18
Ambassador
450,179
Paul McFadden
Environment Control - Kent, WA
Janitorial. Kent, WA.

Bill: Thanks for the post. I too am encouraged by the Dow coming off its low point. The only thing that troubles me is the number of high-paying jobs that have been lost recently. I know 3 people fairly well who lost their jobs. These were white-collar well paid positions. I have never seen this before in all my working years. It's a little scary; the high-paying jobs are usually the most sacred but not today! Take care.

April 23, 2009 12:35 PM #19
Rainer
25,879
Casey Wright
WingWire - San Diego, CA

I like your optimism, but I think Bill and Norma are right on target--the DOW is not a perfect indicator of what's happening in our economy. Unemployment, consumer spending/confidence, etc continue to make recovery difficult. Also, I think it's likely that the DOW is responding to all of the legislation passed in the first 3 months of this year. If the legislation does not work, we probably won't know until late Summer (when we may see another drop). 

April 23, 2009 02:37 PM #20
Rainmaker
719,020
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota Real Estate Expert

I have noticed that some of muyer buyers searches are returning no homes. Meaning the prices have stopped falling somewhat.

April 23, 2009 04:01 PM #21
Rainmaker
247,328
Heather Chavez
Second Self Virtual Assistance - Caldwell, ID
Real Estate Virtual, Assistant (928) 692-3235

I certainly hope you're right, too, Bill.  This has been one of the hardest recessions I have been aware of.  I know we had a big hit in our construction/real estate market in Southern California in the early 90s.  This has been much harder than that.  I appreciate the optimism, though.

April 23, 2009 07:16 PM #22
Rainmaker
1,350,800
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

What was last year at this time or the year before. Do you think we will gain the money we lost.  Sell in June, early July because in late July - August it is going down for the count baby.

April 23, 2009 07:52 PM #23
Anonymous
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Rainmaker
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