S & P Falls; Real Estate Falls; Retail Misses Projections

As we continue in the blunder of what has now been labeled the 'greatest economic crisis since the 1930s' (and rightfully so) - number crunching continues to provide offset projections. Two main industries are at the forefront of either economic progress or further decline:
1. retail and 2. real estate. As April's numbers are being revised, it is becoming harder to stimulate consumer confidence amidst the constant discrepancies in what economists and officials think will happen, and what is actually happening.

Conflicting reports are being spewed out on a daily basis, but the fact of the matter is this: make no difference where you get your news, the numbers are the cold hard numbers. According to Forbes the foreclosure crisis is nearing its peak. Chris Mayer, senior vice dean at Columbia Business School feels that "prices should stabilize" and seizures should soon begin to level off. One must understand the facet of such optimism, as a climb in the real estate market will only follow economic prosperity in the second half of the year. One thing that is encouraging to the consumer is that the number of delinquent borrowers has begun to stabilize, as it saw no increase in March 2009. However, many are questioning the effect of government intervention in the supposed housing market level-off. While it is too early to truly understand if any improvements are inherent of the Hope for Housing program or the Making Home Affordable program, almost all the funding for mortgages over the last year has come from government-controlled lenders suggesting that maybe this time Washington is getting it right...

But hold the phone a minute - contrary to the opinion of Mayer and Forbes, The National Association of REALTORS shows the cold hard numbers. According to NAR's home statistics, Existing Home Sales fell 3% in March compared to February, and 7.1% compared to March 2008. While sales percentages fell in March, the median price of homes increased $7,000 showing that the market may soon allow for future sub prime mortgage recovery; But much to the dismay of the market April has shown the continuation of an 88% fall in median price in U.S. cities as well as a price decline in 134 out of 152 metropolitan markets. Once again any excitement in the real estate market has been short-lived, but the public must remember this is a long term process of recovery. It has taken us the last three years to accumulate the snowball of downturn, and will take us even longer climb back up.

Aside from real estate, retail missed its projections for April, causing the S & P 500 to drop 24 points from 907 to 883 during trading today as numbers have been released. Last month showed a 0.4% decline in retail sales against the expected 0% change. Economists expected no change for April, but missing that mark was still better than the 1.3% drop in March. According to SmartMoney.com, one major retailer effected by the lack of resilience in the market includes Macy's, taking a 9.5% blow to its four-quarter revenues. If anything, it may suggest the stock market is beginning to reach the floor, but recovery is still going to come in small increments.

Forbes
www.Realtor.org
SmartMoney.com