The price of a single family home dropped in August compared to July but was still higher than it was the same time the prior year. According to the S&P/Case-Shiller Index, prices are falling as the impact of the government's tax credit continues to wane, and there's an even bigger negative influence, says David Blitzer of Standard & Poor's.
"At this point, the big factor out there is the foreclosure situation, and it certainly doesn't look very good. We have a lot of excess supply to work through, a lot of potential foreclosures and what appears to be an increasing legal mess. So it will take quite a while to get housing back on its feet."
A depressed housing market and the high unemployment rate are expected to keep consumer moods grim, but consumer confidence did get a slight upgrade in October, according to the Conference Board, and there are other signs consumers are starting to feel a little better. Luxury product retailer Coach beat forecast thanks to strong sales in the US and abroad. The company known for its high-end handbags is also forecasting robust holiday sales, and the results from cruise operator Royal Caribbean were ahead of expectations thanks to stable demand and cost controls. Sticking with earnings, net profits at Ford Motor came in better than expected and quarterly revenues were up. But a stronger dollar sapped the market strength, leaving Wall Street very little changed by the end of the day. Meantime, disappointing results from Swiss banking giant UBS led European stocks lower.
Conway Gittens, Reuters.
