A seller’s market on the housing front could translate into more buyers inside retail stores.
That’s the position put forth by The Street, finding Monday’s (Dec. 28) release of the S&P/Case-Shiller Indices — and its promising forecast for the U.S. housing market — indicative of an overall surge in the economy and, therefore, of potential benefit to mid-level retailers, such as Target.
“The biggest trend as the economy improves and consumers become more flush is that they have more money to spend and can move up one level from Walmart,” Ivan Feinseth, an analyst with Tigress Financial Partners, told the outlet. “And Target is that next step up. They offer good brands, value price and good customer experience.”
The S&P/Case-Shiller report on the housing market for the month of October showed that the national average on prices was up 5.2 percent from Oct. 2014, 0.3 percent higher than September’s year-over-year gain.
“Generally, good economic conditions continue to support gains in home prices,” David Blitzer, chairman of the index committee, stated in a press release on the report. “Among the positive factors are consumers’ expectations of low inflation and further economic growth, as well as recent increases in residential construction, including single family housing starts.”
Should the rise in home prices indeed prove to drive confident consumers into Target stores, The Street notes that they perhaps couldn’t come at a better time for the retailer, which has had a slow 2015 due to factors such as uncharacteristically warm weather (which hurt apparel sales) and shoppers’ discretionary incomes going towards the booming auto market.