We know about the housing market. Now soothsayers worry weakness will spread from Realtors and mortgages to the broader economy.
In that light, Acuras and Impalas may be trying to tell us something.
Maryland auto dealers sold 1,965 fewer cars and trucks in August than they did the year before - a 5 percent decline, according to the Motor Vehicle Administration. This year through August car and truck sales have fallen 4.4 percent compared with the same span in 2006.
That's hardly the degree of damage we're seeing in housing. Maryland existing-home sales fell by a fifth this summer compared with last year, and the number of homes on the market has quintupled from three years ago. But car-sales weakness suggests challenges for businesses that have nothing to do with real estate or home furnishings - even here in the Free State, still lubricated by homeland security dollars.
In coming months the car trade will be Maryland's dashboard warning light. It may not be flashing recession yet, but keep an eye out. "There may be some nervousness about the whole economy psychologically," says Daraius Irani, director of applied economics at RESI, Towson University's research and consulting arm. "So people are saying, `You know what? Maybe this year isn't the year we buy the Lexus car.' "
Actually, Lexuses, BMWs, high-end SUVs and other luxury cars are selling well, dealers say. But less-expensive models and domestic marques are not.
"Lexus is on fire right now," says Len Stoler, who runs dealerships in Baltimore and Carroll counties. "Porsche and Audi are doing well. We're still doing a decent job with trucks. It's not as bad as you might believe. Certainly we're not getting the numbers out of domestic brands that we did a few years ago."
Overall, Maryland dealers are on track to sell the fewest new cars this year since 1999 or 1998. It's true that sales in recent years have been quite high, and now they may simply be reverting to the long-term trend. Even so, they're a proxy for the broader economy, which has been on its own hot streak.
Businesses selling durable assets such as houses and cars are good bellwethers because buying those products at any given time is usually an option, not a necessity. Consumers opting to drive their 1999 Malibus for an extra year are sending signals about economic expectations and their likelihood to buy other things.
Fortunately, the financing pipeline for cars doesn't seem to have clogged up as it has for houses, according to dealers.
