How's the Economy in your town?

[VOguy]

This little story appeared in Inside Radio Magazine today.

The recession watch has begun.

Are we already in one? Cox Radio COO Marc Morgan says "The biggest
indicator is when people in your local market tell you that their
business isn't that good. Right now what we're seeing is a mixed bag."

Although mid- and small-markets have done better the past year, CBS CEO
Les Moonves says "We are aware of trends and we have seen nothing that
would lead us to believe we're in any kind of trouble."

So as you look around your community. What are the signs?

Are people buying new cars?

Are people refinancing their homes?

In your local paper, do you see a lot of ads from people selling their stuff, (extra cars, boats, motorcycles, cottages, etc)?

What businesses have gone out of business in your community, and why?

Have your local school millages and public school funding been cut? Have they cut programs, such as music or sports?

How many homes are for sale on your street, and how does that compare to five years ago? Up or down?

Have you seen more sheriff sales in the local paper, and what economic group has it impacted the most?


Just some thoughts.

[Dark Skies]

The economy here is probably on par or exceeding how it was during the boom years of the 1970's. Building permits continue to exceed previous numbers, the government is putting more and more money back into the infrastructure, hospitals and schools. New vehicles are everywhere (except for mine!), people are traveling while new businesses continue to grow every month. Everyone is making money, living the life and buying their toys of weekend pleasures. The downside is everyone is financed to the hilt by living beyond their means and when the bubble eventually bursts there won't be a dry eye in the house.

[Grim Jim]

Everyone here expects California to have an economic meltdown this year due to a massive wave of forclosures due to home loans signed with insane ARM (adjustable rate mortgage) rates. Add to this a state budget deficit in the BILLIONS of dollars. My home town of Sacramento uses the income off thousands of state workers to act as a buffer against hard times and the state plans to cut many of these state jobs. This has the makings of the "perfect storm" for my city.

Here are a few headlines from the region that show that people are even willing to resort to arson to get out from under and the scary part is that economic forecasters are saying we haven't even seen the worst yet!!!



From Fortune:

With the national foreclosure rate zooming and the real estate market in a two-year funk, the insurance industry fears more homeowners will see arson as a way out of their financial woes.
...
Allstate spokesman Mike Siemienas says his company has seen an increase nationally in arsons among homes in foreclosure. In California, the state's insurance division reports that the number of questionable residential fires in 2007 increased 76 percent over 2006.

_________________________________

Monday, January 14, 2008
Burning Down The Car

From the Stockton Record:

Can't make your auto payment? Light your car on fire, and tell the insurance company you were a victim of theft. That's what a local prosecutor says he's seeing more of these days. But instead of chasing down a phantom arsonist, oftentimes he charges the car owner with insurance fraud.

A symptom of the overall economy - a troubled housing market and high gas prices - auto arsons in San Joaquin County have doubled in the past three years, according to the state Department of Insurance.
...
These days, people in financial straits who torch their cars are often caught in the subprime home loan debacle, and on top of that, they have to pay $3 for a gallon of gas, said Daniel Bale, national director for special investigations at Mercury Insurance Group.

______________________________________

From the Sacramento Bee:

Any way you slice it, the new state budget probably won't be kind to the already sluggish economies of California and Sacramento...[T]he governor's proposed 2008-09 budget could be especially troubling for greater Sacramento. Although he's calling for billions in new bonds for infrastructure projects, his short-term budget plan assumes a 10 percent cut in state spending and the elimination of 6,800 jobs in the upcoming fiscal year. The cuts will be spread statewide, but the pain might feel worse to Sacramentans than to other Californians.

That's because state hiring has effectively propped up the area's economy lately. In the past year, state hiring in Sacramento – totaling 4,300 jobs – has accounted for two-thirds of the region's new jobs, blunting the impact of cutbacks in construction, real estate and mortgage lending. Remove the state as a major source of hiring, and the region's economy – already in tough shape – could worsen.
...
The weak housing market is Sacramento's No. 1 problem, but the state's problems "will exacerbate that," said Dean Wehrli, a vice president with Sullivan Group Real Estate Advisors in Elk Grove. "It's obviously going to affect job growth."

__________________________________

From the Modesto Bee:

The valley, with its historically low wages compared with other places, became a breeding ground for subprime mortgages, some of which offered 100 percent financing, unheard of in previous generations. Groans rose from Thursday's audience of several hundred when presenters spoke of stated-income loans, called by some "liar loans." "Which side of the table was lying?" asked John Olson of the Federal Reserve Bank of San Francisco, rhetorically. "Maybe both were. Some people inflated their incomes. Some borrowers were defrauded, with brokers writing in the incomes they wanted."
...
Many economists in recent months have predicted a deepening disaster because of the 1.8 million subprime mortgages expected to reset in coming months. But Olson said the blame is shifting. "We're finding that it's not resets, but it has much more to do with declining home prices that prevent people from refinancing or selling," he said.
...
Olson said maps of foreclosures in some Bay Area cities show distressed clusters, while those in the valley commonly spread across all neighborhoods..."Foreclosure is the freight train that runs over the homeowner," said Jeff Schrager of the No Homeowner Left Behind nonprofit organization based in Fresno. "I submit that we have a local disaster here. People are losing their homes on a daily basis."

[Grim Jim]

Watch this 3min video that sums up the foreclosure crisis in the Sacramento area pretty well. These people were approved for loans that the banks knew damn well they couldn't afford. People way overextended themselves trying to get a house that they knew they couldn't afford so they aren't blameless either.

[Divinorumus]

Pretty site to behold, huh?

Everyone looking to get something, to get rich, to get something off the next guy, to take maximum advantage of others. Greed, all the way from the top down to the bottom.

Most of this was started a long time ago, when they started playing ownership games with the Earth. It started when people would buy a home thinking it will be worth a million billion dollars some day. Some day? What day would that be you freaking greedy fools out there in the world that think that way? The day your children want to buy a home? Huh?

Ar har har har, someone didn't think THAT ONE all the way through, huh? Or did they? Of course it gets worse than that now, huh? Now you got them same greedy fools wanting their children, their descendants, to inherit and assume this whole indebt and over priced greedy mess of a deteriorating nation they want to stick them with?

I've noticed they are still building a few new homes around here in some areas, but that's probably folks who signed purchase agreements last year. I wonder if they regret that now, property values are dropping daily.

It's true, homes are selling even here for half what their county had them assessed for last years taxes in all neighborhoods. I was saying this was gonna happen to some folks last year. Wait to buy later, or get out now if you own, because then you can buy your home back for half that price later. Some listened, others laughed, ha.

Everyone that works for another is worried about their jobs. The cost of everything is going up but wages aren't, and of course they can't, as some businesses are wondering it they will be around next year themselves. So the super fools "Charge it! We'll pay later when things get better." Oh christ, will they ever learn?

As things begin to crash, many older and retired folks will loose their pensions and healthcare freebies. You could have millions and millions of homeless retired folks roaming the streets, all because they thought they could shaft their descendants with their appreciating escalating monopolized assets, ha.

All of this has a cascading dominos effect. Even property taxes are affected as well, which will affect repayments of bonds too.

Yup, ha, TIMBER! But on the plus side, all of this will greatly reduce gluttonous global consumption. Sweet, huh? And this will effect population levels too. CRASH! CRASH! CRASH!

The Earth can be saved.

[Alpha]

Great subject and thread VO....nice to get a true barometer on what is really going out there.

Here in the GTA ( Greater Toronto Area), despite high fuel costs, outrageous real estate prices, high taxes, there is no evidence that deviates much from the last decade or so relative to economic difficulty.

Houses are selling fast, our interest rates are stable, employment stats are static, although I haven't checked any actuals.

For example, one cannot buy any small house here, that's livable of even available at anything less that $250K.

I'm really interested to hear what is really happening across this great continent of ours.

[VOguy]

Here is what is going on in my neighborhood.

Are people buying new cars? In our town, car sales are down. A typical midsize car that costs $28,500 is not selling at $23,000. A Minivan that retails for $26.725 is not selling at $19,995. There are even many 2007s on the lot. Another sign, advertising for cars has slipped 37% on TV, and 42% on radio. What sales that are being made are typically the person that has cash and is looking for a deal. Toyota seems to be topping the list.

Are people refinancing their homes? In our area, no, but some are. Those who had Countrywide mortgages who were smart enough to see the signs, refinanced at 8-10% on a fixed from a conventional bank. Those who clearly were over their head, a couple earning a combined $125,000 with two new cars (financed), and a mortgage for a $325,000 home with $20k down, are being told to sell, quickly.

In your local paper, do you see a lot of ads from people selling their stuff, (extra cars, boats, motorcycles, cottages, etc)? In my town, no, but clearly in the Toledo and Detroit papers there is a lot of property, boats, bikes, and expensive toys for sale. One ad had (3) boats, and why someone would have three is beyond me. But it seems that many of the sales are "distress", as some of the items are clearly below blue book or under FMV.

What businesses have gone out of business in your community, and why? Restaurants that cater to ambiance. Today, Tumble Weeds closed their store here in town. Several other have also closed, including those that serve the evening crowd looking for a dinner with drink.

Have your local school millages and public school funding been cut? Have they cut programs, such as music or sports? Locally, all the millages have been defeated, and one school is looking at a "pay for play" concept to keep their football program going. Bands are talking about the same concept, but only to compensate the system's use of buses to take students to concerts. One school cut out one of the concerts this year.

How many homes are for sale on your street, and how does that compare to five years ago? Up or down? On our block eight. Normally (in the past 20 years) there has been only two a year. I had the opportunity to talk to a Realtor who said something interesting. He mentioned that there are so many properties on the market that; a) they can't sell them all, b) that their cost of doing business has grown so much due to the service needed to sell homes, that many times they don't try to sell some properties. On a positive note, some homes, which are under conventional mortgages are being sold at less than value, or remaining amount, just to unload them. Another hit... farm property which was purchased when the market was good, and weather was good. Now, land purchased for $1,250 an acre is going at $800 or less.

Have you seen more sheriff sales in the local paper, and what economic group has it impacted the most? All area papers are showing about 2x the number of sales, and I'm guessing it will be 3x by the time the third quarter comes around.

[DorieTesla'sMom]

Down here in Maryland, the Recession has been on the horizon for a while:

It's okay as long as you have a job. We've lived in Md since 1978 (emigrated from Toledo, btw) and there used to be a lot of manufacturing businesses and aerospace industry, especially around Baltimore. But not anymore. Everything is healthcare, finance or sales support. Service economy like entertainment and restaurants. There's lots of jobs, but they pay $7.25 an hour!

Not a great time to sell a house either. I gather it's a good time to buy one. We see houses for sale everywhere. They used to say if you didn't get a contract in 90 days, the asking price is too high. A lot of them must be priced too high.

We have a little mall, and stores are closing. About 30% vacancy rate too.

Also, a few days ago, I went to one of the nationally known clothing stores and the store was pathetically torn apart. I've worked in retail for years so to me that means the Christmas help was let go, they've cut back to a skeleton crew to run registers, and there's nobody to straighten the stock.

Our electric company, BGE, pushed through a rate increase- double the rate per KwH. The other day I saw a woman being interviewed on TV news and had to laugh: she was wearing a sweater and had a hat on- in her living room. The funny thing is, right now, the thermostat is set at 60, I'm wearing a fleece vest and my favorite "pirate" cap! I wish electric meters were like taxi meters and told you how much you'd spent- I might get frivolous and kick it up a degree or two. But then again it's supposed be about 15 degrees for the high temp tomorrow!

We drive zippy subcompacts that get 30 mph, so gas doesn't clobber us as bad as the people who spend $60/70 every visit to the gas station.

One thing we certainly can't afford to do is eat out, especially if it's the sort of place that will cost $50 with the tip. That's like half a weeks' groceries for one meal. But we have a great collection of take out menus!

We went through all this crap in 1976, and I'm not happy about doing it again.

[Delphine]

economic meltdown.... foreclosures....

makings of the "perfect storm" for my city.

ECONOMIC MELTDOWN? FORECLOSURES?

It's not that bad....you're all just about three years behind us. If you don't mind, though, Jim, please be careful about the use of the term "perfect storm"......


From Fortune:

With the national foreclosure rate zooming and the real estate market in a two-year funk, the insurance industry fears more homeowners will see arson as a way out of their financial woes.

What a BRILLIANT idea !!!!! We tried blowing it down, soaking it down. All that work and all we needed was a match! Who would have known!

THANK YOU!!!!

Mayor Nagin: Economic Downturn Good For New Orleans

NEW ORLEANS -- Mayor Ray Nagin said the national economic slowdown could benefit New Orleans, pushing contractors, in need of work, to a city flush with it. Economists said he has a point, to a degree.

Construction is expected to be a major driver of, and rare bright spot in, the region's economy over the next two years, with billions of dollars in repair and new construction projects planned or under way and a need for workers far greater than before Hurricane Katrina.

Yet, while construction workers are typically more mobile than other job seekers and gravitate toward areas offering lots of work and excellent wages - descriptions fitting New Orleans - there's debate among economists and industry leaders over how many new workers the city may attract.

Janet Speyrer, a University of New Orleans economist, doesn't expect a rush of new workers, given factors including the high cost of housing. Some analysts also believe the city's population could begin to plateau this year.

Nagin expressed optimism that New Orleans' so-far sluggish recovery from the storm nearly 2½ years ago is poised to take off.


Please excuse me while I check again to see when the mayoral election is....

[VOguy]

Insurance by fire has always been a solution in many people's minds, but simply it's illegal as well as poses risks to others. Some nutjob in our parts decided to burn down his trailer, but ended up burning down his neighbor's trailers and one of their cars. And since none of them had sufficient insurance, the jerk just put two family's out of of a home.

Nagin would do some good if he would drop all his hairbrain ideas and simply adopt a program based on early W.P.A. policies, and not modify it for political pleasure or financial rewards for his friends. But it's my impression that Nagin wants everything, but does not want to invest anything. Therefore, he will fail.

[Delphine]

Nagin would do some good if he would drop all his hairbrain

HAIRBRAIN? HAIR? BRAIN? The man has neither....





CHOCOLATE, ANYONE?

[Alpha]

Four years have passed since this thread was started. I thought it might be a good time to revisit this topic.

How's the economy in your town now in 2012?

[Project]

Our real estate prices are up as they are every year (but still the cheapest large city in Canada by a looooong shot). Wages are steady. Gas is expensive, but less than most places in the US. I don't know anyone personally that has lost their jobs or their house.