Speaking at a real estate conference in New York, the CEO of luxury homebuilder Toll Brothers , Robert Toll, said, “I see no reason to expect a change in confidence until probably April ’08, when the candidates will fairly well be settled for the presidential election and we’ll start to listen to speeches about how we’ll get better.”
Allrighty then. Now I’m all about the confidence argument; in factI blogged yesterday that much of the downturn in housing is based on buyers’ lack of confidence, since the underlying fundamentals of real estate are still relatively good. Unlike other downturns in real estate, notably in 1991, we the U.S. is not in a recession and interest rates are still historically low.
That said, I’m going to have to beg to differ with the argument that the firming-up of the presidential race roster is going to have one iota of influence on consumer confidence. Come on!!!
Personally, I tend to have the least faith in the U.S. economy at the height of a presidential race--because it’s then that I focus on just how precarious and pernicious our presidential politics can be. It’s then that the “what ifs” rear their ugly heads. Untenable promises are made and unacceptable platitudes are rendered, and my confidence in the future of my bank account starts flashing the empty light.
I would argue that the election of the president has a far greater impact on consumer confidence, or lack thereof, because it is then and only then that we can have some idea of where the economy might be headed. On the other hand, the talking heads of the campaign season--when venturing into economic waters--will inevitably misquote, mislead and misread the reality of realty. So, forgive me Mr. Toll, but perhaps you might want to look to some other indicator for signs of a housing recovery. And good luck in China!
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