Last Sunday night, at 1am in the morning, my wife and I made the spontaneous decision to take the family on a last minute beach vacation to Avalon, New Jersey. We decided to make the trip earlier that day after our son’s final baseball game of the season, but waited to tell the kids until we woke them in the wee hours of the morning. The weather was fantastic and the beach was great. It was one of the best vacations we’ve taken in quite some time. I guess you could say we needed the break.
Signs of economic weakness on the Jersey shore were evident in the ease with which we booked our last minute accommodations and by the abundance of beach parking. Gas and food prices for the most part were very fair, in line with what we pay back here in Ohio. The price of real estate, however, was quite high, at least by my Midwest standards. The cheapest home I saw was about a million dollars, with the average about $3 million. Unless you’re incredibly rich and don’t care, it seems like renting would be the better choice.
When one of us is out of the office on vacation, we like to encourage one another to stay longer especially if the markets are strong. Well, with the markets up ten percent in as many trading days, my ten year old daughter Molly even got in on the action, suggesting I should leave work more often since it “seemed to do so well without me.” Nice!
So what’s driving the markets, as far as I can tell? In a nutshell, the strength has likely been influenced by continued positive earnings news, at least relative to expectations. Last week’s favorable unemployment claims data and leading economic indicators also helped, as did the increased likelihood of gridlock in Washington over health care reform. Volumes have actually picked up a bit as the markets have moved past important technical levels, but may also ease back as investors flock to the beaches for a final break before school returns.
This morning, new home sales came in at up 11% in June, the third monthly increase in a row. While the sample set is a small one, my brother and my business partner both sold their homes in recent weeks at prices they had hoped for in a matter of days and weeks rather than months or quarters.
I don’t know if it was the great vacation weather, the company we shared (thanks Lentz and French families!), or the good markets we enjoyed while I was out, but boy do I feel relaxed. I think I’ll even keep my beard for a few more days.
Chalk one up for Avalon, the beach and the Jersey Shore. Hadn’t been before, but would gladly do it again.
