Un-oh! Consumer confidence, stock market, and new home sales down

In contrast to this week’s optimistic Time magazine articleon what a great economic engine CalifCalifornia's Golden Economy in Time ornia is (and we certainly agree that it is!), there has also been a slew of negative U.S. economic news that serves to dampen our enthusiasm.

Consumer Confidence is down by 5.7 points in October; the Dow Jones average is down 250 points for the week; Case-Shiller predicted this past week that US home prices will decline by 11% next year.

Even more dire, in our opinion, is the increasing failure of banks because of  the extent of toxic mortgages on their books. Two recent Associated Press articles (10-24 article,11-1 article) highlight the severity of the problem.  As the general public becomes more aware of the extent of bank failures, consumer confidence is likely to continue to erode along with an accompanying unwillingness to spend.

Are these long-term economic changes or merely temporary slowdowns?  We continue to be concerned about where the overall economy and especially local real estate markets are headed. We will watch the markets closely and continue to comment.

Jeff Stricker & Steve TenBroeck