Things to Buy When the Economy is Slow

Down economies reduce consumer spending, creating a bind for retailers. As excess inventory collects dust, companies have little choice but to drop prices in hopes of selling more product.

For the bargain shopper with extra cash right now, there are some terrific deals to be had out there. This 4-minute piece from NBC's The Today Show highlights a few of them.

• Wines over $25 per bottle reduced up to 50%
• High-quality diamonds reduced up to 30%
• Summer rental homes reduced up to 50%

Furniture is another discounted item.

Now, these aren't everyday-type purchases, but when the economy turns around for good, the bargain-priced items highlighted in the video are expected to return to their former price levels.

If you have the means, therefore, consider taking advantage while costs are down.

Small Housing Supply Better for Sellers Than BuyersB

The August Existing Home Sales report was released last Wednesday, showing a decline in the number of homes sold nationwide, and a reduction in the median sales price.

Not surprisingly, the media singled these two statistics out, playing them as a big negative.

They're not.

The decline in sales wasn't good, but it wasn't terrible, either -- sales were actually up in half of the regions around the country.

And, citing "median sales price" is somewhat pointless because median sales price only measures the price point at which half the homes sold for more, and half sold for less.

No, it's the third statistic in the report that deserves as much -- if not more -- attention that the previous two. According to yesterday's press release, the national home supply is decreasing.

This is terrific news for home sellers.

In its report, the National Association of REALTORS said that the nation's existing supply of homes for sale fell by 7 percent in August.

At the current pace of sales, that represents a 10.4-month supply, down from 10.9 months in July. With a reduced supply of homes for sale, all things equal, home prices would increase.

This is Supply and Demand in its most basic form.

Economists and experts have long noted that reducing the housing supply is one of the key elements to a sustainable housing recovery and we've seen several indications that this is happening, including builders not building as much.

Longer-term, this is good news for home sellers because a reduction in housing supply tends to lead to higher prices.

(Images courtesy: The Wall Street Journal Online)

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