This is MarketWatch news break money news from Wall Street to main street to your street I'm John -- and I'm Tracy -- sitting in for and Kate's.
And on this show copy lovers everywhere brace yourselves prices at the supermarket are heating up and just when will these prices really jolt consumers.
And just how bad are we talking here.
It will be noticeable it to store I don't think it's going to be and after really slow anyone down from buying it. But it is gonna take you know an extra 304050 cents a pound at least by the coffee.
Who can be bad we'll talk with the coffee price experts and saying she subbing for and Tracy will keep the daily news nugget tradition alive and well.
Tracy any hints well -- like skinny chickens on skinny stick at some of them come up.
And an eerie prediction about the future of home prices and America.
I think we're done fifteen to 20% nationwide was you know big variation across markets some of the markets they're still inflated saying on the West Coast they could easily lose twenty or 30%.
Dean Baker an economist will join us all that after these headlines. I'm Steve photos gonna MarketWatch radio network newsroom on Tuesday August 24. The housing market now looks like it's back to its losing ways pre owned home sales tumbled and even worse than expected 27% in July that's the biggest one month drop ever. The National Association of Realtors says it's largely due to the phase out of a federal tax credit for homebuyers. And the group says sales of single family homes fell to the lowest rate in fifteen years in the future not loading up. As inventories of unsold homes rose two and a half percent to nearly four million. That represents a twelve and a half months supply the highest level since at least 1999. If you've been saying I won't buy a 3-D TV until they figure out a way to get rid of those glasses get ready to break open your wallet. A report out of Japan says Toshiba is working on that technology and expects to unveil three models of just such a TV before Christmas of course you can expect to pay several thousand dollars for the new note 3-D glasses technology. And for getting kind of tired of that boring bowl of oatmeal in the morning the folks at Quaker oats are working on it. The company's owner PepsiCo is changing the recipe of its instant oatmeal giving it larger whole grain oats for healthier texture. -- are also will introduce new products and spend more on advertising. I'm Steve Potisk and you're listening to MarketWatch news break.
More troubling news from the home front existing home sales down some %. As you just heard there in the headline packet with mr. Potisk. Joining us now is Dean Baker to talk more about this he is the co director at the Center for Economic and Policy Research he joins us from Washington. Dean just a few minutes of your time here if we can I know you're busy guy there in the nation's capital following that your -- of the economy. So what do you make of the delayed -- dispatch from the home front. And I asked that knowing that the number of unsold homes. Has hit its highest levels since at least 99.
Yeah what this is kind of predictable stories what -- what's going on -- we have the expiration of the that the homebuyers tax credit you had have. Sign the contract at the end of April when closed at least originally at the end of June. So basically everyone thought there was going to buy a home. Move it forward and what we're seeing over the fall off immediately after that. So we're gonna see going forward is a much lower rate of sales and probably is serious drop in prices again.
Now the National Association of Realtors says this is the biggest one month drop ever. Win do you see the housing market turning around.
It's probably gonna bottom sometime next year -- we have way to go downward we did that the bubble was not we deflated. I think the big question is whether you can deflate without overshoot and there's certainly markets where. Prices have overshot on the downside the long term trend place like Los Vegas Nevada. Phoenix Arizona. The big question is whether we it was of course some renewed their long term trend with a continued good downward if they don't continue if we. Just hit long term trend we're probably talking that's it was an early next year.
And what about home prices put a percent on that if you can how much more do you think home prices will go down.
I think we're going fifteen to 20% nationwide was you know big variation across markets some of the markets are still inflated say in the West Coast they could easily lose twenty or 30%. You're talking about in addition to what we've lost already. Exactly we we have a ways to -- who you know again that varies by a market that want to necessarily expect anything further in the Las Vegas Detroit and in many markets -- plummeted. Almost certainly but -- doubt. But there are markets so long way to go down.
Well I gotta tell -- I'm kind of depressed now knowing that home prices are gonna go down another fifteen to 20% that is a gruesome news.
Well it's not a pretty picture what's unfortunate I think that we have a lot of people would sort of their their head in the club the muted the reality it's you know don't want to hear that it doesn't opposite try to ignore -- reality.
He's Dean Baker at the Center for Economic and Policy Research joining us from Washington DC dean thank you. They certainly enjoyed the show spread the word. Tell a friend about us MarketWatch news break Monday through Friday and anytime that marketwatch.com. Slash podcast and fear coffee lover you're going to hate the following news coffee futures flirting with a thirteen year high there are concerns about the weather in South America and that's driving up prices. Let's bring in sterling Smith now he is a coffee price expert. He's a market analyst at country hedging he joins us from Saint Paul, Minnesota. So sterling. If on the coffee drinker should I worry here.
Yeah you do have some concerns. We are looking at higher prices in these higher prices I think maybe -- we may find them becoming a structural situation. Meaning this isn't just gonna be won temporary price run up but a price or -- it's gonna stay in place. Andy mentioned weather concerns that's one part of the equation here another part of the equation is demand for -- he is going out. Particularly in the country of Brazil itself so those beings that were available. For export our being consumed. So I think we're going to be put in a situation where about 25 pound on the board is going to be cheap coffee. And I'm a little lost predict what I prices going to be right now.
If I go to a supermarket nine get a bag of coffee whether it's Dunkin' Donuts. Or maybe it's Starbucks. Or 8 o'clock coffee caribou whatever. At what point do you think we are gonna start seeing these higher prices keiki and our -- is it gonna happen by year's end.
It's already happened in some cases. Folgers and a few of the other big -- manufacturers have raised prices a little bit. And I think you'll see probably by Thanksgiving. Seeing prices firmed up quite a little bit where it will be noticeable it to store I don't think it's going to be enough to really slow anyone down from buying it. But it is gonna take you know an extra 304050 cents a pound at least by the coffee.
What are we talking about here and in terms of supermarket prices and a percentage.
In terms of a percentage of supermarket prices I think you're probably gonna definitely see already a ten to 15% increase. If coffee peeks out it would seek to fifty pound and you're paying four dollars a pound. At store level your price can be playing closer to six dollars out.
As you mentioned some companies have already started instituting these higher prices. Folgers. The big players like Procter & Gamble -- smokers are already looking at this. At what point do you think consumers will say that says I got a kick the joke.
Well that's the thing the price. Level where it's steps we saw coffee futures in 1990 to move up over three dollars a pound. He did not really affect demand -- you -- think about channel pound the coffee how many trips do you get out of that. Pound quite a few you know there which also buys maybe 23 pound. And a coffee year. So you have to pay an extra four -- five dollars that can't that is not gonna stop people from throwing it in the cards. Where we will see it affecting so or maybe the Starbucks caribou coffee's in the world. There earnings are you going to get hurt because they don't have the pricing part of raised their price. On the retail level. So they have to absorb the higher price and that will count against their earnings.
He is sterling Smith coffee price expert a market analyst at country hedging in Saint Paul. Sterling thank you for your time absolutely and now the daily news -- usually can use the water cooler. And last but not least yes the daily news nuggets and Tracy what do you have for us today.
Well you know how you damaged an appetite when it's just too darn hot outside Atlantis. And it chick flick the same way you that heat wave sweeping the country this summer has resulted. In skinny here shaking hands skinny members means senior profits for chicken producers like Sanderson Farms. And that company is complaining about this these birds there really were feeling the heat -- chickens that centers in processed in recent months came in ten.
Million pounds underweight how's that for a weight loss plan that is a weight loss plan that's a good diet I could be on. That's amazing I guess chickens are saying it's too hot -- eat don't wanna do it so yeah a day ago just go out and sweat like the chicken stamp. Yes we can hang out those scoops with that 101000 other birds found that -- formally the daily news nugget there from Tracy -- sitting in for and Kate's I'm John -- on that's MarketWatch news break -- were around here.
