Timing the Bottom of the Market?

If you’re waiting for bottom to hit, there’s been a few clues lately that may lead you to be believe it has.  Consumer confidence is on the rise with the index increasing from a score of 26.9 in March to 39.2 in April–its highest reading in 2009.

Consumers’ appraisal of present-day conditions improved moderately in April. Those claiming business conditions are “bad” declined to 45.7 percent from 51.0 percent, while those claiming business conditions are “good” increased to 7.6 percent from 6.9 percent. Consumers’ assessment of the job market was somewhat mixed. The percentage of consumers stating jobs are “hard to get” decreased to 47.9 percent from 48.8 percent in March, however, those saying jobs are “plentiful” edged down to 4.5 percent from 4.7 percent.

Locally, median home sale prices in King County have also gone up for the first time in months.  Let’s not also forget the hefty amount of current pendings which should contribute to a second month of what appears to be a positive trend.  There are currently 46 pending units in the downtown area alone!  That’s huge news, considering there’s only been 69 solds since the first of the year, 15 of which have closed in the last 30 days.

Despite news that the unemployment rate rose from 8.5 to 8.9 percent in April, employers have cut fewer jobs in April.  The Census Bureau also began hiring 140,000 temporary workers last month to start the population count that happens every 10 years.  Although temporary, that alone will eventually bring 1.4 million jobs over the next year and get some over the hump.

Construction spending is also up by 0.3 percent despite the forecasted 1.0 percent fall!  Why is that important?  Construction spending has a direct bearing on stocks, bonds, and commodities since it’s affected by interest rates and business cash flow.  Generally, businesses only put money into construction if they’re confident that the demand is strong.  A quick Google search for “construction spending” proves that this holds a lot of weight with those reporting on the real estate market.

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