Tracking of Consumer Confidence

Consumer Confidence continued to soften during the month of October. The reasons for the continued softening are as follows:

• Concern over job security
• Consumers do not have the means to increase spending for big ticket items: cars, houses and major appliances
• Tight credit
• Teenage unemployment at 52%
• Unemployment continues to rise

Consumers who are not worried about job loss or finding a new job are embracing frugal spending behavior.

Remember to share with the consumer that it is the absolute perfect time to buy or sell a property. Home prices and home sales are increasing. Interest rates are inching upward very slowly. They are encouraged to act on the opportunity that is in front of them. Remember there is still around 90% of the workforce that is employed and we need to help them with their housing needs.

Recent Gross Domestic Product numbers are in for the quarter ending in September. The GDP is being reported to be up 3.5% for the first time in 8 quarters. This is the first quarter moving the nation in the direction of an economic recovery. The GDP is made up of three parts of the economy: consumer spending, corporate investment for expansion and Government spending. Consumer spending softened slightly, corporate investment is flat and will be for the next quarter; however, government spending was up substantially. The downside on the government spending is that the funds were borrowed. Also, the current level of government spending cannot be sustained for the long term and therefore the consumer spending and corporate investment will need to begin to grow in order to sustain the increase in GDP as government spending will begin to subside.

There are still many positive indicators for our economy:

• Stock market will move up and down in the near term; however, long term the market will continue upwards for the near future
• The value of the dollar may have reached its floor and will begin to strengthen
• China may have been reporting the growth in their economy falsely thereby highlighting the strength of the U.S. economy
• Interest rates may increase near the end of the second quarter 2010 as inflation begins kicking in
• Banks continue to grow stronger due to earnings of 3% on the margin received when loaning capital on borrowed federal funds
• Appraisals may become more realistic as Congress modifies regulations relaxing the current restrictive policy
• Cost of a barrel of oil still in the normal range and there is nothing near term that will cause a quick run-up in the price
• Unit number of housing sales continue to grow
• Extension of the first time homebuyers tax credit is a possibility

The public is returning to the marketplace for housing but is still concerned about the future of our economy. Let’s assure them that now is a great time to buy the home of their dreams. Go out there and meet someone you have never met before and tell them the great news about buying or selling! Folks need your help to make that decision, we encourage you to help them with their decision to either buy or sell.