A consulting firm in Chicago, the Spectrem Group, reports that until August, U.S. residents with more than a $1 million in investment assets were shrugging off worries about the housing crisis. But now the rich too have caught the property jitters, with 43% saying it is their biggest investment worry, up from 9% in May.

Their concerns are valid…the S&P/Case-Shiller index of U.S. home prices plummeted more in the second quarter than at any other time in the past two decades.

What does this mean for the economy? Government statistics show that those in the top income quintile account for 39% of all consumer spending, which in turn has driven 70% of gross domestic product (the value of all the nation’s output of goods and services).

If the rich pull in their horns, fretting about the value of their real estate, it could have an outsize (negative) effect on the economy, which would be bad for everyone.

For the barter industry, however, recessions of the past have historically been a boom for barter…as companies of every size and description seek the additional business to overcome the slowdown in the cash marketplace.

This entry was posted on Friday, September 14th, 2007 at 7:02 am and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.