Retail growth expected to be slowed by housing slump for holidays
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By Jim Turner
Posted at 10:00 AM on October 03, 2007
We're a month from Halloween, and it already looks like Christmas may be the scary season for retailers.
And it is economists, reviewing the latest housing market numbers, who are saying boo.
The National Retail Federation may be projecting Christmas spending to grow 4 percent from last year. While that may sound good, it will be the lowest growth year since 2002 and below the 10 year average of 4.8 percent.
A big reason many are cutting back is that their credit has been tied up in their housing costs. Recent buyers have to keep up with paying on what had been an over inflated homes value or they've walked away from their investment.
That's not good from the outlook of people expecting to make money off the holiday season or for those who make a living off real estate.
"People are going to be loath to put their hard-earned money down with the prospect of it evaporating in a relatively short period of time through continued falling home prices," said Robert Stevenson, an analyst at Morgan Stanley.
And Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said it doesn't appear the housing slump will go away any time soon. "As far as consumers go, this is another sort of pall over" their ability to borrow against the value of their homes, he said.
Along part of the Treasure Coast this past week Realtors were expressing some positives, as the sale of homes closed in August met or exceeded the number sold a year earlier in Martin and Indian River counties.
And, with a large inventory of homes to choice from, and bankers not wanting to hold onto those where the owners walked away from their mortgages, the prices are coming down.
However, just because there may be more bargains out there, compared to the sellers market of the past few years, bankers have wised up and are making it more difficult to borrow.
To steal a line from Will Rogers, bankers may be concerned about getting a return on their investments, but they're more concerned with getting their money back.
For several years certain people, dressed as home buying speculators, had been trying to quickly fill giant pillow cases with the contents of the candy basket set out on a deserted front porch under a sign saying take one.
Only now that they've been caught, it's the rest of us that will have to suffer the holidays with the bellyache of their gluttony.
Posted at 10:00 AM on October 03, 2007
We're a month from Halloween, and it already looks like Christmas may be the scary season for retailers.
And it is economists, reviewing the latest housing market numbers, who are saying boo.
The National Retail Federation may be projecting Christmas spending to grow 4 percent from last year. While that may sound good, it will be the lowest growth year since 2002 and below the 10 year average of 4.8 percent.
A big reason many are cutting back is that their credit has been tied up in their housing costs. Recent buyers have to keep up with paying on what had been an over inflated homes value or they've walked away from their investment.
That's not good from the outlook of people expecting to make money off the holiday season or for those who make a living off real estate.
"People are going to be loath to put their hard-earned money down with the prospect of it evaporating in a relatively short period of time through continued falling home prices," said Robert Stevenson, an analyst at Morgan Stanley.
And Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said it doesn't appear the housing slump will go away any time soon. "As far as consumers go, this is another sort of pall over" their ability to borrow against the value of their homes, he said.
Along part of the Treasure Coast this past week Realtors were expressing some positives, as the sale of homes closed in August met or exceeded the number sold a year earlier in Martin and Indian River counties.
And, with a large inventory of homes to choice from, and bankers not wanting to hold onto those where the owners walked away from their mortgages, the prices are coming down.
However, just because there may be more bargains out there, compared to the sellers market of the past few years, bankers have wised up and are making it more difficult to borrow.
To steal a line from Will Rogers, bankers may be concerned about getting a return on their investments, but they're more concerned with getting their money back.
For several years certain people, dressed as home buying speculators, had been trying to quickly fill giant pillow cases with the contents of the candy basket set out on a deserted front porch under a sign saying take one.
Only now that they've been caught, it's the rest of us that will have to suffer the holidays with the bellyache of their gluttony.
