California Consumers Hit the Skids
Analysts at the A. Gary Anderson Center for Economic Research at Chapman University in Orange, Calif., are reporting consumer confidence among Californians at the lowest level recorded since it began tracking the economic indicator back in 2002.
The Center’s California Composite Index of Consumer Sentiment stood at 57.6 for the second quarter of 2008, down from 66.3 for the first quarter of the year. A reading below 100 on the index indicates a higher degree of consumer pessimism than optimism.
The report cites concerns about the housing market, gasoline prices, the job market and the volatility of the stock market as key to the negativity among consumers about present and future economic conditions.
These concerns are genuinely justified in California, the state which has led the nation in total properties with foreclosure filings for 19 out of the last 20 months, according to RealtyTrac. A state where home sales volume and home prices have been deflated while job layoffs continue to mount.
According to the Chapman report, consumer spending on big ticket items — like housing — is expected to drop precipitously over the next six months. This will strongly effect the state’s real estate sector, leaving a window of opportunity open for investors to come in and buy up local real estate at bargain prices compared to the overly inflated prices of the past few years.