"That would likely have showed up in one of the questions about personal finances, but those index components were essentially flat," says Chris McCarty, director of the Survey Research Center at the UF Bureau of Economic and Business Research. "Some of this is probably due to record gas prices and increasing debt obligations."
Commercial real estate brokers say consumer confidence ripples to sectors such as retail, which suffers from reduced sales, and industrial, which sees fewer deliveries from distribution centers. "It ultimately impacts all property sectors, and we are seeing it in our business," observes Larry Richey, senior managing director of Cushman & Wakefield of Florida in Tampa.
Richey also tells GlobeSt.com that reports like the UF index contribute somewhat to the decline in confidence, yet they require attention to gauge the overall economy. "It's an important survey and it has to be reported, but it just adds to the feeling," he says.
Components making up the index, based on 429 responses to a random telephone survey, vary on either side of the main number. One component measuring perceptions of personal finances compared with a year ago remained at 59, its all-time low, while another addressing expectations about personal finances a year from now slipped one point to 78.
Interestingly, consumer confidence among lower-income households actually rose this month, although McCarty says reasons are unclear. It could relate to the $300-per-person stimulus checks, earlier adjustments to rising gas prices, or the effect of falling home prices on middle- and upper-income households, he says.
"Florida consumers are certainly in a tight spot," McCarty says. "Housing prices are still declining, lowering the equity consumers have in their homes. Worse is the confusion about when price declines will stop."
McCarty adds that he expects many of Florida's housing markets to bottom out by this summer, based on price patterns thus far. Once those declines stop, he says, potential buyers and mortgage lenders will have a better idea what homes are worth.
"This will dramatically improve circumstances in Florida, which is more dependent than other states on housing activity," he says. "However, significant increases in housing prices are years away."
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