Economic Indicators
Jan 20th, 2008 at 9:16 am by Susie
I’m sure this will shock many people, but it’s right in keeping with my own economic indicators.
For instance:
- The Retread Index. A noticeable increase in the amount of tire retreads per mile on the side of the roads. In good times, individuals and business owners maintain their tires. When money is tight, they buy used - or just keep going and pray.
- The Craigslist Index, in several significant categories. Pick any city at all, go to “Real estate for sale” and type “foreclosure” into the search field. (I started with Seattle and was shocked.)
- The Craigslist Strat Index. There’s been a recent and precipitous drop in the asking price for American-made Fender Strats. (Most musicians have more than one guitar, and when things get tight, they start to sell them off. I’m sorry to say there are some real bargains out there.)
- The Craiglist Used Cars Index. The asking prices for used cars is dropping like a hot rock. Until recently, the only “bargains” were in the SUVs people are trying to unload, but now even desirable used cars are coming down in price. That means they can’t get buyers at the higher prices.
But of course, you know it’s only real when it affects the Beltway bobbleheads, so maybe they’ll wake up now:
The slump in home prices in the Washington region is deepening and spreading, according to data compiled for The Washington Post that shows that for the first time, every local county saw a decrease in prices for a significant period of last year.
The data from the Case-Schiller Home Price Index showed that prices for single-family houses fell 7.7 percent in the region during the third quarter of 2007 from the comparable quarter in 2006. That is among the steepest declines in home prices since 1991, when prices fell 5 percent during the first quarter from the first quarter of 1990.
The current slump is worse in counties far from the Beltway, such as Prince William, where prices fell 13 percent year over year, and slight in others, such as Arlington, which saw a 2 percent decrease.
The regional dip is not as steep as in parts of the country such as California and Nevada, but is worse than the 4.5 percent drop in prices nationally during that period. The figures mask the dramatic variations in the Washington region, where some areas thrive while prices have plunged in others, including Sterling, Manassas and Bowie. Those drops challenge the notion that a strong local economy would shield the region from the worst of the mortgage crisis. Instead, the depression in housing prices across the region is deepening and accelerating, according to the data.
Hmmm, interesting exercise. I checked my town; only 25 homes, but 99% are in the lower income parts of town. I’m waiting to hear Obama and Clinton’s corporate approved recovery plan.
I have an index that I call the “Parking Lot Drip Economic Indicator”.
When you go to a store, before pulling into a parking space, observe how much oil, transmission fluid, etc, have been dripped on the ground leaving a big black mark. Also note trails of drops leading in and out of the lot and onto the road. The worse the drips, the less people are able to afford basic maintenance and the more worn out the cars still on the road are getting.
Another craig’slist indicator: Staffing services (employee brokerages) such Labor Ready start advertising minimum wage jobs…
Ten Bears
Another indicator: part time jobs. Even high end temp agencies are taking on low pay part time jobs. RobertHalf which is a top of the line personnel agency is listing part time accounting jobs.
Here in LA, traffic is down. The stores are usually empty of shoppers. Notice spot shortages of goods more and more. There was one 3 day period where Pepsi was not available. Public transit is jammed.
Very interesting.
Something to also look at if it wasn’t too hard to find would be car repo rates. People will naturally let the new car go before the house.
I have a friend who goes to car auctions at tow yards, he used to make a living just doing that, I remember him starting to complain about how much they had tightened up five months ago. I talked to him recently and he said it has gotten worse.
Lots of little things like that if one is paying attention.