Hey Pro Fools,Here in the metro Washington DC area, especially "inside the Beltway" (for the uninitiated: http://en.wikipedia.org/wiki/Interstate_495_(Capital_Beltway...) where Fool HQ's located, the local economy doesn't look so bad. Unemployment has risen a bit year over year, but remains at just 4.7% (http://blogs.wsj.com/economics/unemployment-rate-by-metro-ar...) -- well below the national average of 7.6%. Real estate prices have fallen, but nowhere near as far as places like California, Florida, or Las Vegas. The restaurants and bars are still crowded on Friday nights. Frankly, we're in a bit of a economic bubble here in DC (which could be part of the problem) and that's largely due to the fact that the area's number one employer is still hiring. The employer of whom I speak is of course the Federal government and according to USAJobs.com, there are currently 2,500+ federal job openings in the 50 mile radius around DC. That's not even counting all of the non-profit trade associations, lobby groups, government contractors, and law firms based in the area that seem to keep growing larger by the year. Obviously Jeff nor I believe that the DC area economy is anywhere close to being reflective of the rest of the nation's local economies, so we'd like to hear about the economy in your neck of the woods. Using the power of the Fool community and sharing our experiences will make not only smarter investors, but smarter citizens as well. So share your thoughts about your local economy -- we're looking forward to reading them.Foolish best,Todd WenningPro analyst
JeffStaying in Hawaii for 6 weeks and the economy over here seems to be falling. The papers report tourism down 16% this year - hotel occupancy is just over 60% and they had a report that they estimate home prices will fall another 30% over the next two years. The Beaches are still beautiful and the temp is 81%
Based on our local news, things are bad in South Florida. Unemployment at 7% - 8% depending on the county (Palm Beach, Broward or Dade). One in 17 houses are in foreclosure. City and county governments are cutting services because they don't have any money (more accurately they have squandered the money, but that's another story). Then there is what I see with my own eyes. I don't know anyone who has lost their job. 10 of the 600 homes in my community were foreclosed last year, but they all found new owners in a relatively short time who paid prices equivalent to what things were selling for in 2002/3. The restaurants are doing good business whenever I go to one and I see plenty of people in stores buying things. The beaches are still filled with tourists. There has been no noticeable reduction in the number of boats out on the water when I go out.If I didn't watch / read the news and I didn't follow the stock market I might not even realize the economy was in trouble. It's certainly nothing like the total economic devastation I lived through in Houston in the early to mid 80s. Ed
In Hawaii for six weeks with half empty beaches? I envy the Fool.FuskieWho hopes you are at least working for your seafood...
I've been fortunate that it hasn't affected me personally in Southern California, though it has some some friends. I'd say the economy is in a bit of trouble.I have one friend who was a bit (well, a LOT) foolish and quit her job last September. She had multiple interviews lined up for late September and October so she felt ok about it. However, all the interviews were canceled after the crash and she's still looking. Another friend was working for a very early start up that was looking great last summer, but funding ran out and hasn't yet been replaced. So, it's now dormant and she's looking for something until her company can get some more funding.The housing market is down as you'd expect, but as I like to pretend to myself, there are only so many places in the westside of Los Angeles so my house property is only down 'a little'.The foretelling moment for me was shopping in Bed Bath & Beyond and Home Depot in December a couple of weeks before Christmas. I normally avoid those places as I really hate crowds, and going to those places in December is just a big no no for me. I geared myself up and went because there were some things I needed. Much to my surprise, both stores were practically empty. I've never seen them with so few people. There were employees all over the place, so I think the stores were expecting crowds. Though I was happy to be shopping without the crowds, it actually got depressing within a few minutes as I realized why the places were empty.
Stealing the words/format of spinningwood for Denver, Colorado:Based on our local news, things are bad in Colorado. Unemployment is high and getting worse. Forclosures are rampant in certain areas. Real estate prices have declined significantly.Then there is what I see with my own eyes. I don't personally know anyone who has lost their job in the last 3 months. On the contrary, I know someone who was just employed. According to Zillow my home price has only dropped 8% from its peak (July 08). I'm still very much in the black having owned my home for more than 12 years.The restaurants are doing good business whenever I goto one. However, a server that I know at high end resturant has express worry that after the holiday season resturant visits will decline. At that particular resturant 2 servers have turned in their resignation but the resturant manger has not hired replacements in preparation for the worst and the servers that were still there gladly did a few extra shifts to protect their jobs if there was a decline. I see plenty of people in stores buying things. There has been no noticeable reduction in the number of skiers and riders on the slopes. During rush hour the roads are still packed with commuters.If I didn't watch / read the news and I didn't follow the stock market I might not even realize the economy was in trouble. On the other hand, I have personally felt the irrational effects of the banking crisis. I / my small business was turned down for a short term expansion of credit for payroll when we landed a new contract that was larger than expected. I took the contract into the bank to show the win - it was from a government backed institution so very low probablity of non-payment. The bank said NO to my request for expanded credit. However, I made payroll by other means and have since then paid down the credit line to zero that the bank refused to expand.Over all sectors of my business revenue will probably increase by 50% this year. Mainly because we have been very good at attracting businse from our competitors not because our market has expanded. However, the sector of my business that is dependent on consumer spending has dropped off by about 30% since August when compared to the previous August thru January. Basically, I can tell that consumers are tightening their belts. Our revenue is still increaseing because my business is more dependent on government spending / budgets which have not changed since August - Education. Next school year may be a different story. However, unless the funding is cut for my specific area we should still have the opportunity to grow the business as a whole next year even if consumer spending continues to drop.Ellipsoid
In Spinningwood Format (tm), for a small suburb NW of Boston, Massachusetts:I don't follow local news, generally speaking, so nothing to report here other than that MA is having painful budget deficits, although nowhere near what CA is experiencing.Then there is what I see with my own eyes. I don't personally know anyone who has lost their job in the last 3 months. According to Zillow my home price is about equal to what it was 4-5 years ago. There has been one foreclosure that I know of in my immediate area (say 50 houses or so), but from the data on my town, the number of foreclosures in the area is fairly low.The restaurants are doing good business whenever I go to one. A Whole Foods Market near me is looking fairly empty when I shop there, and has recently cut back slightly on its hours. No sign of decreased traffic at a local (fairly pricey) gym. The parking lot at the local malls/shopping centers are still generally quite full.If I didn't follow the stock market I might not even realize the economy was in trouble.The company I work for (defense contractor) depends primarily on government funding, and is therefore doing well. We will likely be hiring more people in the coming year.
In Houston the larger engineering companies are cooling off. This cooling has come after five years of rapid salary growth due to high demand for big capital projects in the petrochemical industry (some salaries for engineering specialists doubled between 2003 and 2008). Much of the capital project demand over the last five years has been environmental (benzene removal, etc.) however there has also been a significant demand for refinery expansion. What we're seeing now are smaller environmental-only projects.Demand for engineering personnel peaked about 18 months ago. In the last six months there has been a real dropoff in job openings. There is a general expectation that significant layoffs will occur over the next 18 months. The first signs of these layoffs have come in the last few months.
Reporting from southeastern Michigan(Detroit & area suburbs).Michigan has double digit unemployment. Housing market at a standstill, accept foreclosures. Many people already moved out of state,either south or west looking for work. I guess it's the same doom & gloom across the intire country only a little more magnified here.But it's not all bad news. THANKFULLY I'm still working, and hope to be for at least 5 more years or so till retirement. I work for one of the big box stores who announced 7000 job cuts (THANKFULLY not mine but I feel badly for those who were cut). Part time help is in many cases is down to hours you can count on one hand per week. THANKFULLY I'm at 40 hours. THANKFULLY we were told there is no plans to stop there match on our 401k. THANKFULLY I still have my health and health benefits,and life, and life benefits. And oh did I forget to mention how THANKFUL I am to have my family(my wife,2 daughters, son in law and my favorite and only grandson.THANKFULLY thats my local economy.Sheldon t
Hi Everyone,This thread is great. I hope everyone who can participates. I live in the DC area, like Todd, so we don't see as much hardship as other areas in the country (not until the government starts shedding jobs someday). However, some not-for-profits are cutting employees and budgets as receipts go down considerably. Anecdotally, on Capitol Hill I've seen a few more people pan handling (new people, some young and healthy looking), and on the metro you're asked, "Do you have a dollar?" more often than in the past. Many restaurants along the streets do seem to be little less busy than years past. Although, very expensive restaurants seem as busy as before. (Average salaries in D.C. are rather high given government salaries.)I was in Michigan in August and agree that it seemed very slow, even somewhat depressed. That was the feeling in the West, Central and East of the state that we went through. We were in Chicago in August and it felt pretty normal. We're in NE Pennsylvania every once in a while and it is definitely slower lately -- the stores are empty, even the Barnes & Noble was empty.I was in Costa Rica (Central America) briefly in December and tourism is down, unemployment is up, real estate construction is at a standstill (credit stopped funding it), and it's starting to feel the pinch, too.Best,Jeff
I once heard the difference between a recession and a depression is who is unemployed. If your neighbor is unemployed it's a recession, if you're unemployed it's a depression.That doesn't seem like the case this time around; I don't know anyone that's lost their job here in San Diego and yet everyone around here is acting like it's a depression. I think the number of real estate owned foreclosures in the neighborhood has a lot to do with it. Most seem to be rentals (in San Diego, housing got so expensive that the only way to make money being a landlord was through appreciation; negative cash flow was justified because prices just kept going up. Once they stopped going up, I think a lot of people just turned the keys over to the bank). But the psychology of the foreclosures and in the news is still there.Irronically the long-term benefit is good. Since people haven't actually lowered their income, they're using it to save and pay down debt (the national savings rate recently went positive again) rather than spending beyond their means, but spending not savings is what's going to get us out of a recession.Eventually they'll work through the foreclosure inventory (a sold sign just went up on one a block away) and people will get back to their (wicked) spending ways. I don't have a whole lot of confidence that the average consumer can get out of the habit of spending beyond their means if things seem OK.-Brian
I'm a bit further away - Gold Coast, Australia - so less relevant to the US economy, but nonetheless, we are not immune from the global recession.The Gold Coast is a tourist area, not dissimilar to parts of Florida. Its permanent residents have virtually all moved here from other parts of Australia and the world, attracted by the beach lifestyle, weather and what was once reasonable housing affordability, at least when compared to the other east coast capital cities in Australia. The economy here is largely built on real estate, both new construction, and investment properties. People here move house regularly, trading up as they go. Quite a few people own 2nd or 3rd investment properties, lured by the prospect of capital appreciation.Like the US, UK and other western economies, Australia has been though a house price boom. Unlike the US and UK, the bubble is only just deflating, and hasn't burst...yet.Australia has been one of the main beneficiaries of the resources boom. We have oodles of iron ore, coal and uranium, and have been making hay whilst the sun shone. But the boom is well and truly over.Unemployment is just starting to rise. House prices are just starting to fall. There is more pain to come. According to Demographia, Australia has virtually the least affordable housing in the world.Check out page table 4 on page 11http://www.demographia.com/dhi.pdfSee the Gold Coast there? It's the 3rd most unaffordable market in the world!Back to the Gold Coast. Generalizing, it is a city of self-employed blue collar workers, many of whom work in the housing construction industry. Many have seen their work drop off a cliff in the past 3-6 months. A few big local property groups have gone bust.There are thousands of houses for sale and precious few buyers. Two houses on our street have been on the market for 6 months. When we bought, our house was on the market for 2 days (yes - we bought high, but we also sold high, so it's somewhat of a wash)Despite all this, I don't think the full extent of the coming recession has struck Australia and the Gold Coast. Many people, including the government, are saying it won't get as bad here as in other parts of the world. Maybe. But maybe not too.If you look at Demographia, house prices potentially have a long long way still to fall. As ever, unemployment is the key. Overall, I'm bearish. Regards,BrucePro Stroller
I will put in a voice for Northern California Bay Area. I am sure there are others out there. I think Protovist is N.CA. In summary, IT SUCKS! ScwarchenKennedy and the Dems will be raising taxes and cutting services (wrong ones) to balance the biggest pork budget outside of DC.Housing is down over 30% in good mid range areas. Yes, inflated in '07 but still down. Far east bay area is wrought with foreclosures and resales, short sales at 50% or less of peak. I see the banks are equally non-supportive of small business, all over. Since I do not have a paycheck but good cash flow in my business, that doesn't count when trying to re-fi a mortgage. Especially one that is at 90% plus of current value. They don't care that you have the ability to pay nor have good cash flow. You don't have a paycheck at 38% of loan value - NO LOAN. There is so much toxicity in loans here that they should declare it a "clean-up" site. Because of legalities, Countrywide and B/A are re-writing pic-a-pays for folks that have ability to pay. BUT, Wachovia (Wells) still have no program for option ARMs. They are unwilling to work with folks and I guess would rather have folks walk away. Very counterproductive. The gov needs to put pressure on the banks to assist this forgotten area.As far as the local market and business. Semiconductor manufacturers down over 30%. Similar equipment makes solar industry but capital credit has been shrunk so major projects have been cancelled, reduced or time extended. Medical equipment continues steady but could suffer from capital money shortages at hospital levels - depends on Obama plan for this good news to continue. The building majors such as Pulte are hanging on. Hoping folks keep wanting to come to CA so we can fill up houses and get more building going. But, more taxes, less services, but more welfare---this is a great place. Anyone for the exodus North?jim
Great thread!My perspective from SE North Carolina:We had a large booming real estate market here from 2003-2007. The residential new construction market is way down…it actually seems to have stopped compared to what it was…but in reality there is still some construction still taking place. Houses are staying on the market for 200+ days instead of 30, but I don’t think prices have really dropped all that much yet…may just be hearing the 1st signs of houses selling for 25% less than asking (but I think the prices had gotten way inflated).Commercial construction continues but has slowed down as well. You can see the evidence in the public bid market…where you used to have 3-6 bidders you now have 15-25…I have been to the bids. This means to me that Commercial Contractors that were busy with private work are now not, and are all coming to the public bid opportunities.I am a commercial contractor and know that 4 out of 5 of my private customers with viable projects are now in a wait and see pattern. Two engineering firms that I know of have laid off approximately 15 people each, however others tell me that they are busy or at least have work. I think the most obvious result of the construction slowdown, as it relates to jobs, is for subcontractors, i.e.—plumbers, mechanical, drywall, framers, masons, painters, etc. I know quite a few of these guys who have laid their people off and are down to 2 man crews. A lot of these laid off guys don’t have houses, retirement accounts, surf the web, or take out of state vacations…but they do drive (sometimes expensive) vehicles, hunt, fish, and shop at the mall.Our local Circuit City is going out of business. A mom & pop outdoor furniture company I know of closed it’s doors after 24 years and another local teak furniture importer closed their business. A boat building manufacturer that employed about 30? a year ago has closed and is waiting for better times.Restaurants (and we have a TON of them) appear to be slightly slower.I haven’t heard any horror stories from our local Corning, GE, Ware Hauser, DAK America, et al. I hear that only the really small boats 24’ and under are selling.I must state that these are just my impressions and perspective for this area, sprinkled with a few facts (based on rumors and reading...aren't they the same?).It kind of feels like a bomb went off a while back, and now that the smoke is clearing a few new casualties keep turning up…and everyone seems to be waiting for the next bomb!
I'm in Western Massachussetts. I'm not sure what the unemployment statisic is, but I know a half dozen people personally who have been laid off. Salaries are being cut, and I know quite a few people who have been had their salaries reduced, or are being forced to take time off without pay. I don't go out to eat very much anymore, so I can't comment on the local restaurant scene. With college bills coming in a couple years we're having to tighten the belts to keep from dipping into savings. I was on 4 flights this week - got upgraded on all 4 because none of the 1st class sections were full. This hasn't happened in years. One of the planes didn't appear to be more than 25% occupied. Not sure what my house is worth, but wouldn't be surprised if I'm at 2002 - 2003 prices which is still in the black for me. From my perspective, it feels like a bad recession, but not necessarily worse than other recessions in the past. I've actually lost less money (%) in the market than I did during the 2000 - 2002 downturn. If I were to become unemployed, I'm sure that the recession would turn into a depression, as noted by the previous poster. We have certainly cut back on spending due to deterioration in finances.
Here in east-central Iowa, things are not so spectacular either. December unemployment was 4.6% in Iowa, which is better than national average. One thing I read said Iowa doesn't suffer as much as we don't grow as much. There is some midwestern economic indicator (not quite sure of the correct term), that basically is a number assigned to the economy. Anything under 50 signifies contraction. I'm not sure if it was the state or the midwest region itself that was in the mid 30's. Eastern Iowa is very industrial. Probably within 1-2 hour drive of our house are several large factories which most have heard of: ADM, Cargill, Penford, P&G/Oral-B, General Mills, Deere (layoffs), Whirlpool (layoffs), Quaker Oats (part of Pepsi), Cryovac (closing plant in Cedar Rapids), Clipper Windmill (layoffs), PMX (layoffs), Rockwell-Collins (layoffs), International Paper, and I'm sure others that I can't come up with.As far as agricultural economy, I'm not the best to ask. The inputs to farming (machinery, fuel, fertilizers) are more expensive and profits aren't what people would probably think. Land is expensive and really, it seems the only way you can get into farming is by inheriting land. With a lot of the ethanol plants going under, I'm not sure if there were any issues with farmers not getting paid for their corn or not either.I believe the biggest employer in the state is the healthcare industry. Even that hasn't been immune. The hospital where I work has whittled down its staff and also has said as more and more people lose their jobs and then get off COBRA, they may need to trim more staff. Capital has all but disappeared. I do have some concerns about my own job security. It's times like these you really know you are just a number, but I am in a field (pharmacist) that I should be able to find a job somewhere. But then, you have to deal with the other stuff like trying to sell the house, etc.We've had a double-whammy here with the floods in spring 2008 in which many places are still recovering. In Cedar Rapids, people in this flood zone still don't know if there will be money to buy out their houses or what is going on. Government is looking at ways to offset the loss in property taxes-some new taxes on utilities, increases in property taxes, and a local-option sales tax, among other things. Some companies put money into fixing their plants after the flood (Quaker and Cargill, for example), but others did not rebuild. Many small local businesses were also affected and have not come back. Overall, most restaurants seem to be ok, but fewer new ones are opening. It's the big chains that typically survive around here. We all complain about grocery expenses, but I'm sure a lot is cheaper here than elsewhere. Houses still sell-especially ones under $150,000-$200,000. I have noticed in some of the house ads in the paper, that some of the high end houses (you can get a lot of house here for under one million), have been on the market for a long time (months to a year or more??). the help wanted section in the classified ads has shrank too. People are worried. Personally, we are doing ok, but we've always been people to save up for something before getting it, but I do worry about some friends and family. Becky
As I've mentioned before, I live in the greater DC area, near Dulles airport. Thanks to all the government contracting and such the unemployment rate, although up a bit, is still much better than most places in the country. However, out here in the suburbs ("outside the beltway") where I live the real estate has really crashed. Inside the beltway prices have generally held up okay, but the further out you go, generally the worse it gets. In the past 3.5 years I have seen my home value decline by at least 30 percent. (I've stopped looking at prices the past few months because I'd rather not know if it's even worse than that.) Now I was expecting a decline starting about then, but I was figuring 10 percent or so and therefore shrugged it off. But like about 30 percent of the homeowners in the area I now have a negative equity. And since I'd rather not kill off my limited cash resources with transaction costs and yet another down payment to move to a place I'd prefer, I guess I'll be staying here for a little while longer.I've noticed the restaurants are clearly less busy than before. I go out twice a week, so I've seen a fair sample size the past few months. And I'm flying out to the Bay Area in a few weeks and found a fare sale for $239 roundtrip non-stop! I paid about $100 more than that just a month ago. And the rental car through HotWire will be $24 per day including all the taxes and fees! Obviously the travel industry is suffering, although I'm thankful to benefit from it.Overall here, much less painful than in California and Oregon where I have family living, but still less than ideal.as always, i am full of carp
Todd,The micro economy sucks. I thought I was going to retire and build a model railroad and a great wine cellar. Now everything except TMF is turned off and sold and I'm looking to go back to work. The B&B we run occupancy is off about 20%. Bookings for the summer are trickling in - soon it will be time to start advertising and paying commissions, and hope we don't end up with a loss. The local economy is off and on. Fishing (central Oregon coast town) was non-existent last year and the yields are down this year. So the locals are spending less. Restaurants are still full though!? Tourism was off until the sun came out unexpectedly for agate hunting - suddenly the town, beaches and waysides were all full of people. Some places are out of business but others have started up. This summer will tell ....Don
Coming back to my view that almost everyone (even the fully employed) feeling like this is more of a depression than a recession, Morgan had a good article today about the savings rate having a negative near-term effect on the economy.The Biggest Paradox of Allhttp://www.fool.com/investing/dividends-income/2009/02/12/th...-Brian
I live in San Jose, CA. Ground zero of Silicon Valley. The area is fairly accustomed to boom-bust cycles of the high tech industry. When it comes to employment, it seems Silicon Valley hiring goes through a once-per-decade cycle where finding a job is ridiculously hard or ridiculously easy. We've been lucky to have two of those cycles in the '00s *smirk*California taxes will go up or government services will be drastically cut in order to balance the budget, when the legislature stops arguging and finger pointing over the squandered resources. Neither scenario is good for the economy. I have had to take three weeks of forced vacation this quarter, likely three more weeks await me next quarter, and I had to take four weeks forced vacation between Oct '08 and Jan '09. My vacation time is nearly used up already. We have had some professional staff layoffs and many manufacturing jobs lost. Most semiconductor companies are idling their manufacturing which means the recession is hitting the skilled workers hardest. Semiconductor orders have almost stopped since November.The decline in real estate differentiates this recession from the dot-bomb recession. Back then, people made and lost fortunes in IPO stocks and employee stock options. People felt rich from their paper gains, then lost it all in 2000. Real estate throughout the dot-bomb period still held up in value, and grew. No one was able to spend paper gains in unvested stock options, but unlike the dot-bomb period, people this time were able to tap home equity loans and spend their paper gains on real estate. The Silicon Valley real estate market has declined, but it is the ex-urbs that are really hurting. During the boom times, people were willing to drive two hour commutes to their spacious, ever-appreciating homes in far reaching communities. When gas prices reached $4 a gallon the equation no longer made those houses affordable and real estate values collapsed. My condo in downtown San Jose has lost 20% from it's peak value, however some of those bedroom community houses are down 60%. In my 100 unit condo there is one foreclosure, and no desperate sales, so real estate in the commute-free locations around the San Francisco Bay Area is moderately safe (so far.)Restaurants are still busy (I am getting a lot more restaurant coupons now), malls are still busy, rush hour is still busy. This baffles me. The other shoe has yet to drop here, it seems.
I am from Cincinnati area. I have to agree that the perception of bad economy is much bigger than what daily life suggests. Most of the gloom comes from reporting in the news, just as most of the bloom came from paper money during the boom. When talking to people, most people are concerned with their retirement account losses.I know of one friend who lost his job from a local bank, but most are OK. Restaurants are doing reasonably well. Some of the mediocre ones are not doing so well, but just this past weekend, we had to go back from a favorite restaurant due to the wait.I recently went to a Circuit City store and felt really bad with the liquidation process. That used to be one of my favorite stores. Just next to that is a Linens N Things store just closed.Eventhough there are reports that travel industry is hurting and there are incredible deals all around, I have not been able to find any deals more than usual. We have two trips coming up but they are turning out to be very expensive and do not reflect people cutting back on leisure travel.I keep hearing that people are saving much more and the average savings rate is 10% now. That may be translating into people going to restaurants less unless they really like the place. Economists say that is bad but personally it is a good thing. If this downturn results in people saving more and being fiscally responsible and live within means, I think it served its purpose.Having said this, I will need to borrow a large amount of money in March/April for my business and we'll see how that turns out. It is from an established line of credit, but the bank involved is a local bank that is in trouble. So, who knows? I'll find out soon.Overall, I think if you ignore opinions on the media and live your life, it's not so bad.Ravi
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