Big home improvement chain Lowe’s posted weak numbers today, a 19% decline in earnings, same store sales were down 8%. The stock dropped 2%. It was already 30% off its peak from last year. A couple of interesting points were made about the housing market.
The company says it monitors sales in what they consider overpriced and not-overpriced housing markets and the sales slow down is now spreading from the already hard hit states (Florida, California, Arizona, Nevada) to the other places that didn’t have huge home price run ups such as the Midwest. In fact the few markets still doing well include oil-rich Texas and Oklahoma.
The company said the difference in sales declines between the overpriced home markets and not-overpriced was declining. Meaning everybody’s doing worse. The company has been tailoring its product mix more toward home improvement projects that require relatively little work. They have a new carpet promotion, for example. Major fix up projects like cabinetry are down.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.