I walked in to Starbucks today to grab my morning Joe, holiday decorations are going up. Strangely, it was snowing, the big flakes but not sticking to the ground. Wait a minute, last week was Halloween. Walmart is already having toy sales that are lower than the day after Thanksgiving. What is going on?
What is going on... retail sales for 2 straight months have been declining, September and October. Isn't that strange? Since the Mortgage Meltdown in August people aren't spending as much. Gas prices are climbing to over $3.00/gallon. The dollar is losing value. And income isn't rising. Hell, Gisele Bundchen won't accept US currency for payment for her modeling jobs. Bernanke says the credit crunch is going to last longer then they had hoped. Greenspan reports that reducing Real Estate inventories are going to be detrimental in future US economic growth.
Fewer borrowers qualify for mortgages then they did 6 months ago. Where are we going to find all these new buyers? Lowering the rates will make housing more affordable for some but that would be a small percentage. First time homebuyers could pick up some slack but not if consumer confidence is lacking. Real estate investors will swoop in and buy some bargains. Immigrants could help as well. All of these groups combined are not going to reduce the ballooning real estate inventories.
Based on these trends, I am guessing we will see Christmas in July all the way through December next year. Buckle up its going to be a bumpy ride.
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