Cars vs. housing collision

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Good morning. A bunch of nuggets and news items:

Cars and Housing: AutoNation had a disappointing second quarter, and the chief executive blames the weak housing market: ‘I cringe a little bit every time I hear from specialists who say there’s no spillover from housing onto the consumer,’ AutoNation CEO Mike Jackson told CNBC. ‘I flatly disagree with that.’ AutoNation’s weakest markets included California and Florida: ‘Those are the big down housing markets, and there’s a big direct parallel between the housing market and automotive retail sales.’

Inventory glut in SoCal: From Annette Haddad’s story on housing market weakness in today’s L.A. Times:
‘Southern California has a 12.6-month supply of unsold existing homes, about double the inventory from a year ago, according to a sampling of for-sale listings taken by the California Assn. of Realtors. The month before, the supply was 12.5 months.’ And what does high inventory mean? ‘We think inventory is the best indicator of future pricing trends — excess inventory equals lower prices ahead,’ said building analyst Daniel Oppenheim.

More price weakness coming: ‘Moody’s predicts that from its peak in 2005, the national median home price will fall about 9% before stabilizing next summer,’ said Steve Liesman, CNBC’s senior economic correspondent, during ‘Squawk Box’ Thursday. ‘That means the price has further to drop than it already has.’

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