The financial markets ended the third quarter with some good news. The Federal Reserve reduced the Fed funds rate by half a point. While the cut had been telegraphed and mortgage rates had largely priced in the move, there was still a brief period of optimism. Real estate stocks rallied along with other rate sensitive sectors, and it seemed to be the beginning of a new market. Just a few short weeks later, the “sure-thing” of another half a percentage in cuts by the end of the year was not so certain. The latest inflation figures came in a little hotter than expected, bond yields increased, and there is a definite chill in the market’s air.
The weak sales trend continues at Rivieras and West Beach Grand Condominiums with only one sold unit in the third quarter, versus four this time last year. Rivieras and West Beach Grand Condominiums are vacation rental restricted properties, so generally not properties for income generation. This year has seen lower second home activity given higher interest rates and other buyer headwinds, especially for income restricted properties.