Jeremy Hobson: And for more let’s bring in our regular Tuesday analyst, Juli Neimann of Smith, Moore & Company. She’s with us live as always from St. Louis. Good morning, Juli.
Juli Neimann: Good morning, Jeremy.
Hobson: What’s at stake from an economic perspective? There are a lot of businesses that have said that they won’t hire if they have to provide health care for their employees.
Neimann: That’s actually kind of a cover. The reason small businesses don’t hire is because they don’t have any demand currently for their products. So when they actually see demand for their businesses or services, they’re going to hire anyway simply because it means they make money, and that’s the key criteria here. So this is really just kind of smoke and cover.
Hobson: Let me get your thoughts on one of the things that happened this morning which is we got housing numbers, the latest numbers on home prices from the S & P Case-Shiller Index and it showed a further decline in the month of January.
Neimann: Well, we’re really seeing a bottoming out process here. It is no huge resurrection of housing prices because we’re talking going back to 2003 prices. We’re down a third from our peak. But what we’re seeing is stabilization and this is in spite of a backlog of foreclosures, tighter mortgages, and very modest improvement in unemployment.
What you have to look at though is this price segmentation. Housing is separating out by low income. Namely in Atlanta, lower priced homes went into foreclosure. But high income areas like Miami and Phoenix where you have vacation and retirement, condos are doing very well there. The Northeast is very resilient; they have higher priced homes. So price level is what we’re looking at, the damage is going to be in lower priced houses, that’s persisting, it’s also due to unemployment. But the higher end is recovering.
Hobson: Juli Neimann, analyst at Smith Moore & Company. Thanks as always.
Neimann: You bet.