What about 2010?

How will 2010 be affected by the 2009 Holiday shopping season.  The question for the 2009 Holiday shopping season is, "Who is going to be shopping and how much will they be spending?"  High unemployment will have a dampening effect on demand and spending.  Consumers are concerned about debt and can be expected to be less willing to incurr debt for big ticket electronics and consumer items, so they will not be buying much.  Consumers who are just beginning to recover financially can be expected to limit their spending to avoid going back to where they were, so the will not be buying much.  Many who are employeed mat be afraid of losing their jobs and will not spend or buy much.  The unemployed just have much less to spend and will not buy much.  For reasons, the 2009 Holiday shopping season may be much less rosy than the pundits would have us believe.   If that is the situation, it will make for a gloomy beginning for 2010.

How will 2010 be affected by the weakness in the housing market, and by the way the the market has been redefined since 2004.  Going into 2010, foreclosures and short sales can be expected to increase as many mortgages will be coming into distress as arms begin to adjust.  Consumers can be expected to remain unwilling to over extend their spending on housing, having learned the dangers of over extending.  Many consumers will continue to believe that renting is the better financial housing decision.  Demand for large homes can be expected to remain soft; 1) because many families are now finding they can get along quite well in a smaller residence; and, 2) because of the interuption of the normal pattern of families moving up as their children start their teenage years - - now they no longer have a need to move up, since their teenagers have become adults and started moving out.   Demand for retirement homes can be expected to remain soft because the loss of equity for many families of retirement age means they are unable to move and are deciding to remain where they are living.  

The result of all these factors may be, at the least, further stagnation of the housing market; and worse, further decline.