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Articles
Ultra Rich Spending Less And Chasing Quality, Forbes
America’s richest are spending less cash, and are being more choosy about the products they actually buy. The Survey of Affluence and Wealth in America 2010--a creation of American Express Publishing and the Harrison Group--polled about 2,400 people from the richest 10% of U.S. households. Here are the top 10 consumer trends of the ultra-wealthy:
By Steven Bertoni and Sara Peck, July 22, 2010 Forbes
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Ten Top Ultra Rich Trends:
1) The wealthy are spending less and shopping smarter: The rich are still willing to buy high-end products, but relish sales and
quality, not namesake or status.
2) They may not be optimistic, but they’re happy. About 91% of those surveyed thought the U.S. was still in the middle of a recession, and 60% felt it would take one year or more for a full recovery. But 71% were happy in their personal relationships. Contrast that to the 43% of the general population who reported being happy.
3) Family is important. About 83% of those surveyed said they eat dinner with their family at least four times a week, up from 16% five years ago when they survey began.
4) Cutting costs is stylish now. You might see an increase of millionaires shopping at Wal-Mart. More than 77% of respondents defined themselves as resourceful and more self-reliant. Online deals and coupons are big, and the rich were more likely to wait for items to go on sale than in the past. Purchasing generic brands and buying in bulk were also popular.
5) They are less worried about their jobs. Confidence in job security increased 20% from last year.
6) More online shopping, less real people. Good news for Amazon, EBay and Google: the affluent prefer to research and purchase products online, and far fewer relied on salespeople.
7) They are better communicators. About 64% said that they now talk to their kids and spouse about money. Divorce is also down nationwide.
8) They feel less guilty about being rich. In 2009, many of the wealthy surveyed felt guilty about buying luxury goods or discussing their worth. Now, they’re trending toward less guilt and a greater desire for people to know they are affluent.
9) They’re increasing brand loyalty. There was a 6 % increase in consumers who said “I have a few brands that I like, and a 7 % increase in those who said “the brands I wear say a lot about me.”
10) Print might make a comeback, maybe. About 69% answered that they pay more attention to print ads than those online. Only 8% said they use Facebook to make a purchasing decision, though more than 40 % had Facebook accounts.
Hamptons Home Sales Double as Wall Street Buyers Fuel Rebound., BB
The Hamptons, a string of towns beginning about 75 miles (120 kilometers) east of Manhattan on Long Island’s south side, attract financial and Hollywood celebrities including Goldman Sachs Group Inc. Chairman Lloyd Blankfein and media mogul Martha Stewart each summer.With the average price of Hamptons properties down 24 percent from the 2007 peak, sellers are getting more realistic, said Paul Brennan, Hamptons regional manager for Prudential Douglas Elliman.
Hamptons, New York, home sales more than doubled in the second quarter from a year earlier, solidifying a turnaround after two years of Wall Street reluctance to splurge on beachfront property.Transactions climbed to 479 in the towns on Long Island’s East End, the second-biggest jump in at least a decade of record keeping. Larger, more expensive homes boosted the median price 17 percent to $900,000, New York-based appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The largest sales rise was in the first quarter.“We’ve returned to a more normal volume of sales,” said Jonathan Miller, president of Miller Samuel. “It feels like a boom because there was such a void in activity a year ago.”A U.S. stock market recovery helped ignite confidence, said Judi Desiderio, president of Hamptons, New York-based Town & Country Real Estate. The Standard & Poor’s 500 Index gained 29 percent from the beginning of 2009’s second quarter through the end of June this year. New York City financial companies added jobs for a fourth straight month in June, helping bring the unemployment rate down to 9.5 percent. Gains included 2,400 finance jobs, according to the state Labor Department. “Wall Street is employed again,” Desiderio said. “They’ve had some winnings or earnings from the market and they’re putting it into real estate.”
By Oshrat Carmiel and Ashley Lutz, Jul 22, 2010, BB
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Housing Market Stumbles, WSJ
The housing market, whose collapse pulled the economy into recession in late 2007, is stalling again. Construction Slows, Inventories Build Amid Weak Job Growth, Tax-Credit End.
In major markets across the country, home sales are deteriorating, inventories of unsold homes are piling up and builders are scaling back construction plans. The expiration of a federal home-buyers tax credit at the end of April is weighing on the market.On Tuesday, the U.S. Census Bureau said single-family housing starts in June fell by 0.7%, to a seasonally adjusted annual rate of 454,000. The U.S. started 1.47 million homes in 2006, before the housing bubble popped.Future construction looks even weaker. Permits for single-family starts fell 3% in June, following big declines in both May and April. "We're hovering at post-World War II lows," said Ivy Zelman, president of Zelman & Associates, a research firm. While the housing downturn dragged the economy into a recession nearly three years ago, now it is the economy that is pulling down housing, says economist Patrick Newport at IHS Global Insight. Without sustained job growth, the housing market likely won't improve. That in turn will ricochet across manufacturing, retail and other trades heavily dependent on home building and consumer spending.
By Nick Timiraos and Robbie Whelan, July 21, 2010 WSJ
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Housing's Woes Reverberate, WSJ
Renewed Weakness Means Pain for Related Sectors That Had Sniffed a Rebound
The fresh downturn in housing is weighing on an economy already bruised by financial turmoil and battered confidence. From lumber yards to moving companies, the renewed weakness in the housing market is hurting."March was a great month—we got excited about the rest of the year," said Michael Dunn, president of Dunn Lumber Co., which runs 12 stores in the Seattle area. "April was flat, May was down and so was June. Now, nothing is happening."Mr. Dunn said that the flurry of home buying before the expiration of federal home-buying tax credits in late April allowed many area builders to sell some of their inventory of finished homes and pick up the pace on completing other houses. He also saw more business from contractors repairing homes for sale. But the drop-off since then has sapped his hopes that sales during the typically busier warmer months can show any improvement over a moribund 2009.
By Justin Lahart, July 21, 2010 WSJ
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07/21/10 wsj_Housing Woes Reverberate
Housing Bubble Leaves $4 Trillion Hangover, BB
"Can the US economy really return to “business as usual” when it has 4 million houses surplus to requirement, when 1 out of 4 mortgages are in negative equity, and when by our calculation, it is burdened with $4 trillion of excess mortgage debt, equivalent to 30% of GDP?" Dhaval Joshi
The bursting of the U.S. housing bubble has left homeowners buried under about $4 trillion of excess mortgage debt, according to Dhaval Joshi, the chief strategist at RAB Capital. The CHART OF THE DAY compares the total amount of home loans outstanding with the value of residential real estate, as compiled by the Federal Reserve, for the past two decades. The latter is adjusted to reflect the average 40 percent debt-to- value ratio that prevailed from 1990 to 2005. To eliminate the excess and bring down the ratio to its historical norm, either house prices would have to surge or home-loan repayments and defaults would have to accelerate, Joshi said today in an interview. “In either scenario, it would be a disaster,” the strategist said, adding that prices are unlikely to recover any time soon. The U.S. has 4 million more homes than it needs, by his count. Interest rates will have to stay relatively low for “a prolonged period” to revive the housing market, he said. Joshi raised what he called the “4 trillion dollar question” in a July 9 report. Barry Ritholtz, the author of “Bailout Nation,” reproduced most of the report - with charts - in a posting yesterday on his blog, the Big Picture.
By David Wilson, July 16, 2010 Bloomberg
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