Monday, January 24, 2005

Survey: Affluent Consumers See Real Estate Bubble

NU Online News Service

Rich Americans are optimistic about the economy but worried about housing prices and the war in Iraq.

McDonald Financial Group, Cleveland, has published data to support that conclusion in a report on a survey conducted by researchers at Penn, Schoen & Berland Associates, New York. In late December 2004 and early January, researchers interviewed 400 U.S. residents who had at least $500,000 in investable assets or annual incomes of at least $150,000.

McDonald's January 2005 confidence index for affluent consumers is 55 out of 100, down slightly from an index of 56 recorded in January 2004. The index is set up so that scores over 50 indicate optimism and scores under 50 indicate pessimism.

When researchers conducted the latest survey, only 23% of the survey participants said jobs are "hard to get," down from 41% a year earlier.

But 56% of the participants said there is a real estate bubble, up from 50% in January 2004, and 34% of the participants worry that rising interest rates will cause a sharp drop in housing prices.

Although the percentage of participants who said they are very or somewhat concerned about the national budget deficit fell to 70%, from 80%, 58% now say they are concerned that a damaged American image due to the situation in Iraq will hurt U.S. international business.