Monday, October 16, 2006


From the Sacramento Business Journal:

A cooling housing market and the upcoming election appear to be two reasons that business is flat for some retailers, they say. Retailers and others add that uncertainty about the economy and rising interest rates also are making consumers more cautious about spending on their homes than they've been in the past few years.

"I would say our customers these days are a little bit more prudent in their spending," said Thomas Arbuckle, chief executive officer of Earthworks Custom Landscaping Inc., which specializes in landscaping for new homes. Landscaping a backyard typically costs from $15,000 to $50,000, depending on the size of the yard and the features, such as waterfalls and lighting systems.

Now that housing prices have cooled, consumers are more cautious and not as confident about the value of their homes, he said. "My customers used to say, 'We made $250,000 on the sale of our home,' " he said. "Five years ago, we had 15 to 17 projects going at one time. Now, we're running between two and four at a time..."

Elizabeth Lake, general manager of the Ethan Allen Design Center on Madison Avenue, said election years and a slower housing market tend to put a damper on business. The full-service interior design shop offers furniture, upholstery, accessories and other items for the home.

"It's been a rough quarter for our district," said Lake, who added the Madison store will close when Ethan Allen opens a new outlet in Roseville. "It's been very, very slow, and I think it's a combination of several things ... the housing market being down; interest rates are up; and it's an election year, and that seems to affect people. "The economy seems to be so unstable," she said. "People are insecure, and (what we sell) is a luxury, not a necessity.

1 comment:

drwende said...

And what's shoring up some sectors of retail is "no payments through 2008" or "no interest through 2008" deals.

What's interesting is that savvier investors than I am figured out back in 2003 or 2004 that the economy was going to founder on a housing bubble. They're the ones who bought stock in low-priced brands (Sears, Penneys) when it was cheap and have done very nicely since then. Payday advance chains also had a stock-price boom in that period.