Give consumers a reason to buy The housing market, like the rest of the U.S. economy, is starting to cool down. In August the National Association of Home Builders reported that confidence among U.S. home builders regarding the market for new single-family homes had dropped to its lowest rate in 15 years. It was the seventh consecutive month in which builder confidence had fallen. The biggest declines in builder confidence were in the South and West. The smallest decline was in the Northeast. NAHB chief economist David Seiders said the decline in builder confidence was the major result of rising sales cancellations and substantial growth in new and existing home inventories, which rose to a 10-year high in July. The new home sales rate in July was down 21.6 percent for the same month a year earlier. Seiders said these factors were caused by more potential buyers taking a wait-and-see perspective due to the uncertainty of the housing market and the record high energy costs that weighed on house demand. The interest from investors and speculators also continues to wane after a major influx during 2004 and 2005. Seiders said the decline in the housing market was predicted because home sales and housing production, which hit record levels a year ago, weren't expected to sustain themselves. He said that market activity for the rest of this year is expected to decline before stabilizing in 2007. Scrambling to unload bloated inventories, home builders are offering home buyers an array of non-price incentives. Everything from backyard landscaping to swimming pools to flat screen TVs have been used to entice buyers. USA Today reports that Rodrock Development in Kansas offered buyers $2,000 worth of backyard trees. Winnick Homes in Michigan looked to attract consumers with $5,000 in upgrades. It's more than selling a product With the cooling off of the housing market, consumers who watched their home values rise rapidly and borrowed against their homes, reports USA Today, are now cutting back on spending, which is contributing to a slowdown in economic activity. In its 10th biannual national consumer study, retail marketing consulting company WSL Strategic Retail, reports that in these uncertain times, most consumers shop where they best can afford things, seeking safety and security in their daily lives as well as in their shopping experience. The study found that retailers can no longer expect to gain shoppers and that they must focus on building frequency and transaction size. Based on the study results, emotional factors, such as "a good place to spend time browsing" and "a place that attracts customers I feel comfortable around" are key factors. WSL Strategic Retail founder Wendy Liebmann said shoppers are looking to "retailers to provide a connection, a sense of intimacy and security as never before." She said retailers looking to increase the number of transactions and gain loyalty among a finite number of shoppers will realize "it's all about building trust, every day." For more: WSL Strategic Retail, 307 Seventh Ave., Suite 1206, New York, NY 10001; (212) 924-7780; fax (212) 924-7608; www.wslstrategicretail.com. Send this article to a friend Enter your e-mail address: Enter your friend's e-mail address: Click the image below to send: © 2006 Branch-Smith Publishing