Ford Motor Co. is “built to lend a hand.”
That’s what the car maker’s new information-rich ad campaign says. For instance, did you know that Ford Service centers are essential to your community and still open? We need our cars and trucks, even if we can’t go anywhere in them.
Ford is also dangling discounts during this economic crisis. For qualified buyers who use Ford credit to buy a new Ford, the company will defer three payments and make three payments. The idea is to give new buyers six months before payments are due.
Ford will also deliver the new vehicle to your home, so you don’t have to shop for in a crowded showroom.
“You have a lot to take care of—let us help take care of you,” intones the reassuring voiceover. I wonder, if you happen to be in the market for a new American-made vehicle, does this offer help to reassure you?
Automobiles are a large purchase, no matter how the economy performs. When the economy fails, every purchase all of a sudden becomes a large purchase. And right now this headline: U.S. auto sales in states with coronavirus lockdown orders to drop 80%, has failure written all over it.
What About the Housing Market?
If you just look at the shiny objects in your social media stream, there’s no sign of a looming housing crisis, much less any price corrections.
— Curbed Austin (@CurbedAustin) March 26, 2020
When I see the above “ad” for the cute little house, I experience cognitive dissonance. My brain struggles to process two opposing facts. One fact is the house is outrageously over-priced. The other fact is we’re facing a lethal contagion and the economic tsunami it fosters.
Perhaps, it’s just a matter of time, counted now in weeks and days, before the real estate market also deflates. Los Angeles is one over-priced market that is starting to show signs of deterioration.
Zillow said the number of new listings now coming onto the market each day in Los Angeles and Orange counties is down 30% compared to a year ago. That compares with a 4% decline at the beginning of the month.
The Mortgage Bankers Assn. reported mortgage applications for a home purchase fell 23% in California last week compared with a week earlier.
To complicate already complicate matters, Keith Gumbinger, vice president of the research firm HSH Associates, said non-qualifying mortgages have dried up because investors who typically purchase the loans from originators “don’t know if they are going to get their money back.”