Posts Tagged ‘recession’

Affordable Vacation Homes For The Wealthy

Friday, August 13th, 2010

In this market the affluent still want an island getaway home – just for a lower price tag.

  • Real estate developers are marketing affordable vacation homes to wealthy clients in a tough market.
  • Developers are trying to avoid lowering the price on existing homes, and instead are advertising affordable second, third and even fourth homes that offer extra amenities like pools and beach access.
  • The goal is to play to value and convenience, while still including the perks of a vacation house.

Facts & Figures

  • At a sporting club in central Florida, members can buy 1,500 square foot cabins starting at $600,000.
  • On a private island in the Turks & Caicos clients are able to purchase small houses for as low as $1.4 million, which is 44% less than the $2.5 million required for the island’s least expensive property and home previously.

Best Quote

“We’re trying to get the point across that you can have a great place in a wonderful island for, quite frankly, a reasonable price.” – Steve Schram, Chairman, DPS Sporting Club Development Co.

Consumer Spending Slows Further During Spring Quarter

Monday, August 9th, 2010

The United States is on a slow road to economic recovery that gets longer and longer as consumers spend less.

  • Sluggish consumer spending and stagnant personal incomes reflect a slow economy this spring.
  • Experts believe that economic growth will lose further momentum in the second half of the year as high unemployment, insecure consumers and renewed troubles in housing continue to plague recovery.
  • The rate of economic growth in the United States is about half the pace of what it normally is for a country coming out of a recession.

Facts & Figures

  • Consumer spending accounts for 70% of total economic activity.
  • The GDP slowed to an annual growth rate of 2.4% in the April-June quarter.

Jobless Claims And Recovery Concerns Rise

Thursday, August 5th, 2010

As jobless claims rise, Americans are becoming even more concerned about the economic recovery.

  • New unemployment claims rose last week, which may indicate a weak economic recovery.
  • The unemployment rate is expected to climb to 9.6% (up from 9.5% in June).
  • While growth expanded 3.7% in the first quarter of 2010, it fell to a 2.4% annual rate in the second quarter.
  • Generally speaking, consumers have cut spending.

Facts & Figures

  • Claims for state unemployment benefits rose 19,000 (the highest since April).
  • 4-week average of new jobless claims rose 5,250 to 458,500.
  • Jobless claims fell in 2009 but have stalled this year.
  • The number of people on emergency benefits rose 60,993 to 3.31 million in mid July.

Best Quote

“The bottom line is that any recovery in employment is going to be very slow. It’s likely that we’re still 9.5 percent unemployment or awfully close to it by the end of the year.” -Scott Wren, Senior Equity Strategist, Wells Fargo Advisors in St. Louis

Charitable Foundations Finally Looking Up

Thursday, July 8th, 2010

Finally, some good news about philanthropy in the wake of the financial crisis!

  • Endowments for charitable institutions grew steadily last year, rebounding from the sharp declines of 2008.
  • Despite the rebound, many foundations and charities have still cut back on spending and giving.
  • Most foundations (55%) gave less in 2009, but a few (16%) gave more.

Facts and Figures

  • Hundreds of grant makers saw their investments increase by about 20% this year (compared to a 26% drop in 2008).
  • Charities and foundations carry a median debt of over $20 million.
  • 38% of charities spent less in 2009, 20% spent more.

Americans Save Up In A Fragile Economy

Thursday, July 1st, 2010

It seems our consumer culture is starting to appreciate a nest egg – spending less and saving more.

  • This May, wary Americans put more into savings then any other month since September, reflecting a cautious financial attitude after the economy’s tumble.
  • This conservative financial attitude comes mostly from sluggish wage growth, which could get even worse at the end of the year when temporary census jobs expire.
  • The gross domestic product takes a blow when consumer morale is low, because it is largely based on spending; meaning that saving – though wise – slows America’s economic recovery.

Facts & Figures

  • In May, the personal savings rate rose +4%
  • At the height of the housing boom in 2005, the personal savings rate was barely 1%

Combating Homelessness From Every Angle

Monday, June 28th, 2010

The Obama administration gets into the nitty-gritty of the helping the nation’s staggering number of homeless citizens.

  • The homeless population in the United States is growing and does not just include single adults but also countless American families.
  • On June 22nd, the Obama administration unveiled a plan to combat increasing homelessness. The plan, called “Opening Doors,” aims to eradicate homelessness for single adults, families, children, and veterans.
  • The first step will be to examine what strategies have worked in cities and counties across the nation. Chicago’s push for affordable housing was so successful that the Obama administration hopes to apply it nationwide.

Facts & Figures

  • The number of homeless families had increased by 30% in the past two years
  • The number of homeless veterans of the Vietnam war is greater than the number that died in it.

Best Quote

“This is a tragedy we can solve.” – Shaun Donovan, Chair, Inter-agency Council on Homelessness.

Foreclosed Homes: A Good Deal For Buyers?

Wednesday, June 23rd, 2010

The number of foreclosures on private homes continues to increase, and it shows no indication of stopping in 2010.

  • Between 3 and 3.5 million houses in the U.S. are expected to go into foreclosure in 2010 (up from 2.8 million in 2009).
  • Foreclosed homes are sold “as is,” so there are many potential complications and hidden costs.
  • It’s typical for bank-owned homes to have electricity, gas, and water completely turned off, emphasizing the importance of buyer inspections.

Facts and Figures

  • There have been more than 300,000 homes per month for 15 consecutive months that received foreclosure notices.
  • An estimated 45% of adults may consider purchasing a foreclosure.
  • Some banks are offering financial incentives to those buying foreclosures.

Best Quote

“We’ve plateaued at an unprecedented level of foreclosure activity.” – Rick Sharga, Senior Vice President of RealtyTrac

How To Sell The Modern Home’s Most Boring Accessory: Paint

Wednesday, June 16th, 2010
A fresh coat of interior paint is a manageable, recession-proof way for homeowners to spruce up their homes. Just make sure you don’t show the product in action.

  • The paint company Valspar has designed a unique advertising campaign that appeals to the imagination and emotions of consumers.
  • While most paint advertisements feature flannel-clad men and women rolling a brush across a blank wall, Valspar decided it’s best not to remind people that painting your wall is actually a chore.
  • Valspar commercials features exotic locations, a soothing voiceover, and impressive colors that pop onscreen. There is also a 16 x 30 foot wall that stands abstractly in meadows, on beaches, or near mountains.

Facts & Figures

  • Valspar spent $35.2 million in advertising in 2009. Sherwin-Williams (one of few household paint names) spent $52 million.
  • The revenue for exterior paint fell 12% from 2007 to 2009. Interior paint sales slipped just 3%.

Best Quote
“Consumers talk about what they feel when they finish the project, and that’s a sense of pride and accomplishment. They say, ‘I feel like an artist,’ and ‘I feel a sense of freedom and joy.’ They ladder up to a lot of high-level emotional benefits, and that’s what we’re trying to tap into through this campaign.”  - Susanne Champ, Director of Marketing At Valspar

Could The Recession Recovery Be A Fakeout?

Monday, June 14th, 2010

With all of today’s turmoil (the Gulf oil spill, Europe’s debt problem, consistently high unemployment rates) it’s no wonder economists have pondered whether or not we’re heading for Recession Part II.

  • It seems that the possibility of a “double dip” recession, in which a recession is followed by a short recovery that slips into another recession, seems to have decreased slightly since last year.
  • Several factors have influenced this positive change, namely that major U.S. companies have reported profit growth in the first quarter of 2010 and a $1 trillion bailout package has been approved been European leaders.
  • But unemployment is still high, and that GDP growth is already slowing.

Facts & Figures

  • Some believe the chance of a double dip recession is 20% now compared to 50% last year. Others says 25% now versus 30% last year.
  • Unemployment is still up at 9. 7%.
  • GDP growth in the fourth quarter of 2009 was 5.6%, the highest in 6 years.
  • Economists predict the growth rate will slow to 3% this year.

Best Quote

“One of the things to remember is conditions do not have to be perfect for the economy to grow, but there’s a limit to how much bad news this economy can take.”  - Mark Vitner, Senior Economist, Wells Fargo Securities

Reminder: Despite balmy weather, U.S. economy still not okay

Friday, June 4th, 2010

Remember when all those banks were failing in 2009? Well things have only gotten worse in 2010, as you can see. What’s really scary is how much money these struggling banks control (in green).

Check it out, reflect, and then you can get back to stimulating the economy with your reckless summer spending.

Bankss.png

(click on the image to see the full-blown version of the graphic)