The Economy: View From Here

I have no real idea how real estate sales are doing in Las Vegas, Los Angeles, Atlanta, Minneapolis or Baltimore. Not swimmingly, if I can read between the headlines. I see real estate moguls (like the chap who cleverly bought the Chicago Tribune) assuring us it will all be over by the end of this year.
I see blogs about how banks are not using TARP money to lend, rather trying to cover their “heritage” assets, and so forth. (Sounds SO much more reassuring than “toxic”, doesn’t it?) I just read a news blurb suggesting that VW has passed Toyota as the biggest car company.
Unbelievable! I drove one of those things fifty years ago. They were so CUTE. (Only car I ever named.) But the world’s biggest car producer? Where have I been? The article goes on to say that maintaining that much production is so costly it can ruin you. Much better to be smaller. Does that suggest hope for Chrysler?
Yesterday, I got my letter from Social Security telling me that I will get $250 by the end of May. That, I presume, is mostly because I’m still alive. They would only give me five bucks more if I died. On balance, best to be alive and get my own personal bailout money.
From what I can see from my front door, real estate around here isn’t doing as well this spring as it did last spring. Last spring, by around this time, five houses sold within sight of my house. One chap retired and moved to his vacation home. He didn’t get all he wanted from his house, but he got enough to move.
The family next door to him sold their house and took a job in Mississippi. It sold so rapidly they had to rent another home for six weeks or better. Neither of these guys had big mortgages left on their houses so they could afford to take less and still have money left over.
But, across the street in the new development (all woods until 2003), three more houses sold. One was owned by a divorced man who worked 90 miles away. It sat empty for nearly two years until a pair of working school teachers offered enough to make him let go of it.
Another house belonged to a hockey player who went to a minor league team in Texas. He had only owned his house for a couple of years, but he got a big enough offer to sell. (A chap further down the block who took a job in Florida last September, still has his house up for sale.)
The last house to sell belonged to a man in his mid-thirties who lost his job in the medical field. He sold and moved in with relatives before he had to default. All he could find was part-time work doing what he used to do at a living wage.
A couple of owners who tried to sell their homes all winter, gave up recently and took the signs down. At least four or five signs are still up—no sale pending signs, no price reduced signs. I’m sure they can’t go down much considering the mortgages they still owe.
A lot of people around here bought new cars over the past three or four years. I haven’t noticed anything new yet this year. You can hear some of us coming; the rust spots are starting to show, but we’re keeping the old jitneys going.
A middle-aged couple who must move to Lansing this summer have just put their house up, but there hasn’t been much activity at all. They live a few hundred feet away. I’ll miss them and their kids—but maybe they won’t be gone as soon as they plan to be.
One of the convenience stores up at the corner went out of business this week. A breakfast joint that’s been a local fixture for decades made the headlines when the help volunteered to work a day without pay. As I look at the strip malls around here or just the stores near me, I’m seeing more and more empty store fronts.
My podiatrist built his own building in a good neighborhood with the idea of renting out half to another medical practitioner. He hasn’t had a tenant all winter. The professional building down the block from him has recently put up a large sign advertising medical space for rent.
A medical practice near me that built its own lavish building recently has moved to a much less ostentatious rental space down the block.
I do know of three houses being built near me. All are owner built—and they’ve been working without much of a crew. Two of them were started last summer and aren’t finished yet; the third was begun late last fall. Discover Card is offering 5% off if you will just please, please go buy something at your friendly local Lowes or Home Depot. I walked through J. C. Penney’s a couple of weeks ago—and it’s a good thing I knew my way. There was no one to ask.
A lady down the block was laid off from a large international relief agency in the area. We know indirectly of several people who’ve lost their homes. Prices have not really gone down. People are coming to the end of their unemployment extensions—but they haven’t dropped off quite yet. What will happen when they do?
Our Liberal Democratic Governor, Jennifer Granholm, says she’s going to have to cut welfare and education next year. Two large local school districts are sweating millage renewals this May. (That’s not new money, that’s simply the same old, same old.)
The acquaintance of mine who was trying to sell his deceased father-in-law’s duplex in Grand Rapids finally has a bite—for about what foreclosed properties are going for. He won’t have much left after paying off the mortgage. So much for inheritance.
We don’t have hoboes riding the rods through towns yet (no more trains?). We don’t have WPA types swinging pickaxes as they lay new roads yet. But things aren’t good. I don’t hear anybody speaking with a great deal of optimism.
Always before, Detroit has gotten its feet back under itself and pulled the rest of us back up with it. This time GM has been told to plan on going into bankruptcy by June 1st. Will Chrysler marry Fiat or will it sell off the pieces and die? Ford isn’t doing all that well either.
For Michigan—and perhaps for other states—this is something new under the sun.