Is our Current Inflation “Transitory?”

Coins stacked up indicting inflation

The Federal Reserve officials have described the current period of high inflation as “transitory.” In other words, “short-lived.” However, consumers I talk with and from my own personal experience, I see things differently. It’s interesting to note that a June survey of consumer expectations showed that median inflation expectations over the next 12-months jumped to 4.8%, the highest reading in history for a series that goes back to 2013. That’s a lot higher than the 2% level that the Fed considers healthy for a growing economy. Also, the consumer price index jumped 5.4% from a year earlier, the largest increase since the financial crisis.

I’m sure you’ve noticed that prices for almost everything are increasing however it seems that at the same time, we are running out of many things from available houses, computer chips, building supplies, used cars, and even paper stock.

All of you heard the stories of crazy bidding wars for houses. We’ve seen it here in the Lakes Region, and it’s happening all around the country. We sold one property recently (a non-waterfront) for $220,000 over the asking price. While that may be the exception, so many Realtors® are reporting bids well over the listed price. I’ve heard that in a few hotspots in Texas, Realtors® have brought in food trucks and coffee vendors to make the lines more tolerable at open houses.

Vacation rentals are going crazy! Talk with the rental companies in the Lakes Region, Airbnb, booking.com, VRBO, and expedia.com. Availability is extremely tight trying to find a quality weekly rental in our area during July and August it’s next to impossible. CNBC reported a home in the Hamptons rented for the summer for $2 million! In popular resort towns, nationwide many rentals are fully booked.

How about the price of gas? My office Manager just came home from California yesterday and reported the price of gas at $4.40 a gallon. Think of what these increases have done to shipping costs.

Have you tried renting a car recently? The Labor Department reported they skyrocketed 87% in the past 12-months. CNN reported Orlando Rental Cars at $225 to $350 a day. In Maui, the cost was reported at $725 a day for a cheap car. That’s not the weekly cost! How about a sport utility vehicle in Arizona for $700 a day. What a bargain.

Try building a deck lately, never mind a house? Lumber prices rose approximately 240% since 2020. Advantec plywood is at $113 a sheet. I paid $35 a sheet in 2006. 2x4x8 studs were up to $12 each, although today it dropped to $6.90 a stud…a nice improvement. This past year’s surge in lumber prices had added $35,872 to the price of an average home. Keep in mind that lumber usually accounts for 20% of the cost of the project. Think about the other 80% costs they’ve skyrocketed also.

Paper prices are up 40%. We found this out recently when we printed our brochure. Plus, there’s a shortage of paper nationally.

Copper prices topped at $4.90 per pound for the first time ever in May of 2021. Scrap copper prices have more than doubled since the pandemic began. Plumbers & electricians can’t believe the increases.

Most Americans don’t realize shipping rates have gone up close to 50 % higher than last year. Food, steel, raw materials, boats, cars, appliances, etc., all are seeing price increases. Used car and truck prices leaped 45% over the past 12-months, according to the Labor Department.

Unfortunately, the large run-ups we see on the inflationary front create huge economic distortions, like why we’re running low on everything. Make no mistake; inflation is the hidden tax it will eventually push millions of Americans down.  The ultimate damage will be reflected in our currency which is slowly collapsing. With the increased money printing, increased debt, and stimulus programs implemented involving trillions and trillions of dollars, we are lulled into the belief that the dollar today is worth the same as it was last year. However, the monetary base has exploded, the dollar doesn’t buy what it used to, we have tons of public debt to deal with, and it seems like we’re closer to the beginning than the end of this inflationary spiral.

Have you noticed lately that Americans have gone wild? It’s almost like a frenzy. A crazy run-up in house prices followed by rampant speculation as everyone tries to keep up with the “get rich quick” stories we read about.

Did you know that American’s opened more than 10 million new stock brokerage accounts last year? Look how fast Robinhood has grown where they lure young traders, sometimes with devastating results. Look at the huge number of individuals who invested speculatively in Gamestop. There was a 2,000% increase in the sale of highly speculative penny stocks this year over the previous year. Look at how at how many companies are going public this year. There were 480 IPO’s in the US in 2020, an all-time record, a 106.9% increase over 2019. However, for 2021 for the first 6-months, it has already eclipsed the 2020 record.

This brings me to another sign of huge inflation and a potential currency devaluation…currency speculation. Yes, we are seeing it today with individuals piling into cryptocurrencies at unprecedented numbers. Total money in Bitcoin hit $1 trillion recently. It rose to almost $63,729, and now it’s at $32,954  Ethereum, the second-largest crypto, soared above $4,196 for the first time. However, it dropped to $1985 recently. Tether, the 3rd largest crypto, has all kinds of credibility issues. A recent warning from the Boston Fed President calling it a potential financial stability risk doesn’t help the crypto industry.

The things people are speculating on get wilder every day—crazy prices for digital artwork. Outrageous prices of “collectible sneakers,” record art painting sales, and other speculative investments are all increasing due to inflationary pressures.

I can remember when I started in Real Estate in the Lakes Region in 1976…from 1977 to 1981, cumulative inflation was over 50% in 5 years! Back then, we thought prices were going up but what really was happening was our currency was collapsing. In fact, the dollar nearly ceased to function as the world’s currency back in 1978.

So why can’t the government just stop inflation as it gets worse? No one at the Fed or higher government levels are willing to do what Paul Volcker did at the time in 1981. I was marketing Broadview Condominiums, and he raised interest rates dramatically. It set us up for two decades of prosperity; however, it was extremely painful in the short term for many businesses. I think the sad truth is that American’s aren’t willing to suffer any short-term pain, so the government and political leaders will continue to pacify with more debt, stimulus, and bailouts making matters worse. It’s like feeding candy to children or putting helium into the economy. It’s a temporary or “feel good” solution to a problem that’s not going away.

So is inflation “transitory,” as the Central Bank suggests….only time will tell.

Frank Roche, President of Roche Realty Group, Inc. with offices in Meredith and Laconia, NH

This article was written by Frank Roche. Frank is president of Roche Realty Group with offices in Meredith and Laconia, NH, and can be reached at (603) 279-7046. Please feel free to visit www.rocherealty.com to learn more about the Lakes Region and its real estate market.

winter Snowmobile

Real Estate in a Winter Wonderland

As I drove around the other day with my kids, I was looking at some ...
Read More →
Roche Realty Group Host Annual Toys for Tots Drive, Invites Community Participation

Roche Realty Host Annual Toys for Tots Drive

As the holiday season approaches, Roche Realty Group is excited to announce the kickoff of ...
Read More →
Small Business Saturday New Hampshire

Small Business Saturday: Living Gratefully in New Hampshire

We have so many things to be thankful for here in New Hampshire: plenty of ...
Read More →
Annie Brown Joins Roche Realty Group

Annie Brown Joins Roche Realty Group

Meredith — Frank Roche, President of Roche Realty Group, Inc., with offices in Meredith and ...
Read More →
Gunstock Mountain in Gilford, NH

Gunstock Upgrades for Winter as Real Estate Shows Resilient Growth

As the leaves of New Hampshire’s forests transition from the vibrant hues of fall to ...
Read More →
Preserving New Hampshire's Lakes

Preserving New Hampshire’s Lakes: A Community Effort

With over 250 lakes and ponds throughout New Hampshire’s Lakes Region, there are unlimited outdoor ...
Read More →
Home Inspections — The Uninspected Abode: A Spine-chilling Tale of Regret and Terror!

The Uninspected Home: A Spine-chilling Tale of Regret and Terror!

One night, not many years ago, in a quaint, somber town nestled amidst the haunting ...
Read More →
Interest Rates

Interest Rates Impacted by Treasury Yields

It looks like the national picture for housing stats has not improved in recent months; ...
Read More →
Local Housing Crisis: Challenges and Solutions

Local Housing Crisis: Challenges and Solutions

Our communities are facing a shortage of both residential and commercial properties, a scenario that’s ...
Read More →
Fall Splendor In New Hampshire

Fall Splendor in New Hampshire

New Hampshire in the fall is akin to stepping into a live canvas painting — ...
Read More →
Samoset Condominiums on Lake Winnipesaukee

Condominium Sales Surge in New Hampshire’s Lakes Region!

As we start entering October’s bright fall colors, I thought I’d take a look at ...
Read More →
Empowering your offer

Empower Your Offer in a Sizzling Real Estate Market!

As a seasoned real estate professional, I often consider the market conditions to keep myself, ...
Read More →
Reviews of New Hampshire's Lakes Region

Reviews of New Hampshire’s Lakes Region

We’ve had a great summer in New Hampshire’s Lakes Region, and we’re approaching the brilliant ...
Read More →
Waterfont Sales Activity Wolfeboro, New Hampshire

Waterfront Sales Activity in the Lakes Region

As we head into September, I have compiled data and insight into what is happening ...
Read More →
Labor Day Weekend

Labor Day Weekend in The Lakes Region

Labor Day Weekend has arrived, and the weather forecast for the Lakes Region looks fantastic, ...
Read More →
Interest Rates

The Mortgage Interest Rate Dilemma

This past week, we saw an increase in mortgage rates following a rise in bond ...
Read More →
Best State To Live In — New Hampshire at #3

New Hampshire 3rd Best State To Live In!

WalletHub just released its rankings of the best state to live in for 2023. It’s ...
Read More →
City/Town Comparison can make the research process easier

City/Town Comparison For Your Move

Some studies place moving to a new location as one of the top ten most ...
Read More →
New Hampshire Real Estate Lacks Inventory

New Hampshire Real Estate Inventory Crisis

A Multifaceted Analysis of Rising Interest Rates and Beyond New Hampshire is currently facing a ...
Read More →
Peaks of New England

Exploring the Peaks of New England

In my younger years in school, I always loved geography. Living in New Hampshire, there ...
Read More →
Climate Exodus: Insurance Companies Seeking Refuge from High-Risk Sates

Climate Exodus: Insurers’ Fleeing High-Risk States

Flooding, Forest Fires, Heat Waves, Tornados, oh my! The recent stretch of weather has certainly ...
Read More →
Real Estate News Headlines - Lakes Region NH

Real Estate Tidbits to Consider

Here are a few real estate tidbits I’ve pulled to keep you up to speed ...
Read More →
Roche Realty Group Sells out Lakeside at Paugus Bay

Roche Realty Group — 6 Months in Review

Closed sales for the first 6 months of 2023 have been impressive at Roche Realty ...
Read More →
Newfound Lake

Lakes Region Waterfront Sales Activity 6 Month Comparison

Below you will find data and insight into what is happening in sales activity on ...
Read More →
Buying Land

Buying Land in New Hampshire — Comprehensive Guide

New Hampshire, also known as the Granite State, offers a diverse landscape that includes picturesque ...
Read More →
Weirs Beach: A Tale of History, Community, and Natural Beauty

Weirs Beach: A Tale of History, Community, and Natural Beauty

As we celebrate the 100th anniversary of the oldest bike week in the country, let’s ...
Read More →
First Five Months of Lakes Region Real Estate

Five Months of Lakes Region Real Estate Activity

The month of May’s real estate statistics just came out for New Hampshire, and it ...
Read More →
A bird's eye view of Long Bay on Lake Winnipesaukee

South Down Shores and Long Bay on Lake Winnipesaukee — Its History

When construction started in 1981, Laconia’s South Down Farm offered a picturesque setting for condominium ...
Read More →
Memorial Day — rows of gravestones with flags in military cemetery

Memorial Day Weekend Arrives in the Lakes Region!

The long-anticipated Memorial Day weekend has arrived after a long winter, and the Lakes Region ...
Read More →
Unlike the dandelions new listings aren't popping up in the Lakes Region

Will Listings Start Bloom Like Dandelions?

Will Real Estate Listings Bloom Like Dandelions? During my rides around the Lakes Region, I’ve ...
Read More →
boat launch

Public Boat Launches in the Lakes Region

New Hampshire’s Lakes Region is a paradise for boating enthusiasts and we are now entering ...
Read More →
Real Estate Scams

Real Estate Scams to Be Aware of

One of my Realtors® received a call today from a gentleman purporting to be the ...
Read More →
Brant Point Lighthouse, Nantucket overlooking the ocean

From the Lakes Region to Nantucket

I spent a few days on Nantucket Island this past week for a quick getaway. ...
Read More →
Lakes Region Real Estate Is Still Hot

Lakes Region Real Estate Market is Sizzling

The real estate market in the Lakes Region and the state of New Hampshire is ...
Read More →
Lake Winnipesaukee Kayak

Buying a Lake House — Where to Start?

Owning a waterfront home in New Hampshire’s Lakes Region is a treasured experience. For many ...
Read More →
Home improvements

Home Improvements Before You Sell

One question I commonly get asked is, “What type of projects or improvements should I ...
Read More →
Single-Family units are down

How’s the Lakes Region Market Looking?

We’ve already passed the first quarter of 2023 for real estate sales in New Hampshire’s ...
Read More →
Moving into new home young happy couple celebrating toast Champagne

Buying a Home? Follow These Tips & Tricks

Spring has officially arrived and launches the beginning of our spring selling season for real ...
Read More →
Marketing

How Marketing Real Estate Has Evolved

Back in the year 2000, the world was at the beginning stages of a major ...
Read More →
Mount Washington, New Hampshire

New Hampshire — 30 Reasons to Move Here!

With lakes, beaches, mountains, forests, rivers, and the ocean for people who enjoy the outdoors, ...
Read More →
New Hampshire Ski Resort

Ski Resorts in New Hampshire Are Ready for Spring Skiing!

It’s been a good week, and mother nature hit our region with a blanket of ...
Read More →
Market Trends

Real Estate Market Trends to Follow

I’ve been pulling up some current research on the real estate market on a national, ...
Read More →
Carol Mattice

Roche Realty Group Welcomes Carol Mattice

Meredith — Frank Roche, President of Roche Realty Group, Inc, with offices in Meredith and ...
Read More →
Kevin Shaw - Roche Realty Group

Kevin Shaw of Roche Realty Group is Top Producer for 2022

Laconia— Frank Roche, president of Roche Realty Group with offices in Meredith and Laconia, recently announced ...
Read More →
Lisa Lewis

Lisa Lewis Joins Roche Realty Group

Meredith — Frank Roche, President of Roche Realty Group, Inc, with offices in Meredith and ...
Read More →
Wanda Keenan

Wanda Keenan Joins Roche Realty Group

Meredith— Frank Roche, President of Roche Realty Group, Inc. with offices in Meredith and Laconia, ...
Read More →
Land for sale

Buy Land in New Hampshire — They’re Not Making it Anymore

The science is in and the more trees a state has, the happier and less ...
Read More →
The Price of Real Estate

Did The Price of Real Estate Increase in Your Town?

Everyone’s always interested to see how their real estate values have performed over the past ...
Read More →
Laid off employee in recession

Are We Headed into a Recession?

It’s pretty big news lately; Microsoft, Amazon, and other tech companies have laid off more ...
Read More →
Price Reduced

2022 vs. 2021 — Is The Lakes Region’s Frenzied Market Over?

It’s that time of year to provide all of you with an update on real ...
Read More →

Leave a Comment