Consumer Confidence at It's Lowest in Years

By
Real Estate Agent with The Don Edam Group - Owner Options Realty

According to Mortgage Industry News, the consumer confidence index dropped to 95.6, its lowest reading since October 2005. The decline was much steeper than forecast: analysts expected consumer confidence to drop to 99 from 99.8 in September. With all the scary headlines, high inflation, and foreclosures in nearly every neighborhood, who wouldn't be worried?

Another report shows home prices dropped 4.4% year-over-year in August, the biggest monthly decline since 2001 when the index was established. Homeownership declined further in the third quarter, to 68.1% from 68.3% the previous quarter, compared to a peak of 69.3% in 2004. And even more foreclosures may be coming as adjustable mortgages reset.

In short, the housing market is not doing well at all, and this to a backdrop of rising oil and food prices, a weak dollar and increasing job market instability, which results in low consumer confidence. Low confidence often means low consumption which may trigger further job losses, and so on. This looks a lot like a vicious circle, and those are pretty hard to deal with.

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Rainer
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Vicky Poe
Good Ole Rocky Top - Crossville, TN
Realtor/ Auctioneer
You are exactly the only problem is consumer confidence.  The public watches too much tv news.  Interest is great and the inventory is good.  There is no reason to not buy now.
Nov 01, 2007 08:58 PM #1
Rainmaker
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Barb Merrill
Cactus Mountain Properties, LLC - Tempe, AZ
GRI, Associate Broker
That is our job, to boost consumer confidence!  Investing in purchasing a home is a long-term investment that will pay off in the long run, both by providing a place to live and developing equity.  I see nothing depressing about that!  It is the American dream!
Nov 01, 2007 09:26 PM #2
Rainmaker
73,930
Cris Burlew
Beach & Luxury Realty, Inc. - Saint Pete Beach, FL
Broker ~ St Pete Beach FL Real Estate

This is the perfect time to buy a property. Our prices look very attractive to our neighbors to the north...Canada, who has a strong dollar right now. In our area, they said last year, they didn't have to buy and could wait a year. Now, they will be buying.

Barbara is correct...it is OUR job to boost the confidence. Show the consumer the reasons for buying/investing in real estate. Even with foreclosures on the rise, it is a perfect time for the investor and especially for a first time homebuyer.

We all need to keep our positive attitudes in the face of what the media spews.

Nov 01, 2007 11:30 PM #3
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Rainer
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Don Edam

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