Inflation, Eggs, and Real Estate

I looked at the latest Federal Reserve data (September 1, 2023) on the process of a dozen grade A eggs, mostly because I wanted to revisit my Egg Indicator post. I wrote in that post how my models are pointing toward a price stabilization or lower prices, in general, in the future. That model proved to be correct and prices have dropped to just above the $2 mark at $2.065.

The consumer is still stressed with high prices but relief is starting to work its way into the system. Food prices are coming down and with last week's pause to raising interest rates, the general market and economy appear to heading in the right direction. The Federal Reserve is taming inflation and interest rate rises might be done.

This put everyone in good spirits and things went "risk on" in the markets. We had a 5-day rally from a "lower low" and next week will be important as we test the "lower high" price (around 4400) on the S&P500.

Any breakouts will be good news for the general market!

On the Real Estate front, things are not looking good. If you read r/REBubble or listen to the general chatter, the high interest rates are crushing real estate investors (REI) who bought at high prices with the intent to flip (not even fix sometimes).

Prices are coming down, trapping many REIs, and foreclosures will rise but I guess that those opportunities will be quickly snapped up by private investors and strong hands. The weak hands will get flushed out now and the real estate market will return to normal functioning once interest rates ease.

If you're a Millennial or even a Gen Z'er, this market environment for real estate is something of a rare unicorn. It's fun to watch from the sidelines and it's best to sit tight and put more money into your 401k. My guess is as good as anyone's but I think we'll see stagnation in the real estate market until rates get cut and the stock market is poised to rocket higher once those rates come down.