cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Advisor

Second wave of down economy

  Since I live within commuting distance of a metropolitan area there are quite a few construction workers living around here.  These large construction contracts are figured on years in advance.  When the economy went into a tailspin in 2008 they kept working and seemed unaffected.  I have ran into some recently and they have said they have about all been out of work since last October.  These are some good paying jobs and it makes me wonder if another wave of bad news is coming.

0 Kudos
42 Replies
Highlighted
Advisor

Re: Second wave of down economy

Housing construction has been in the dumper since 2008.  Our son is a small homebuilding contractor/trim and tile guy, and he's staying busy remodeling bathrooms and kitchens in established households with people who have good occupations,  

On the occasional week or so when he's got a break between finishing one job and when the next customer wants to start theirs, he will come here and do repairs and remodel for us.  It looks like this to me...when he's slow, and we ask him to come and knock out a job, someone will call him the first day or so he's here. 

We feel that he is doing okay, not overly busy, but busy enough to support himself and his helper.  If he was tied to new home building only, he'd starve.  The ripple of no new houses hits so many things: landscapers, furniture and appliance stores, home decorating, and all kinds if things...this is why new housing starts are such a serious economic indicator. 

The commercial contractors are slowing down due to a couple of things...completed contracts with no new ones let, as you say, and excess inventory of commercial real estate in many (virtually all) areas.  I do not think anyone believed that this downturn was going to last this long...and as I told one of thekids yesterday on the phone, I think we may be looking at it ten years from now, if not longer. 

I heard a stat yesterday that we as a government are borrowing forty cents of every dollar we spend.  Who can sustain that but so long? 

0 Kudos
Highlighted
Senior Contributor

Re: Second wave of down economy

It may be the second wave and then it could be the 'babyboomers'.

Read an article a while ago that forecast a big downturn in house needs as the 'boomers' down size to small house or apartments and ther just are not enough buyers to buy up all the full size house that are freed up let alone require more.

Many 'boomers' have too little set aside for retirement but are counting on cashing in their big homes to give them more spending money.

Think it has been noted how many are turning 65 each day now as the official boomer age range starts into the official retirement age group.

The boomers have been blamed for many changes in society from a shortage of schools in the 60ies and all the way through their life spans and needs so now they may need more small dwellings and buyers for their big family houses. They have impacted the economy before and maybe this is the next impact to come over the next 10 years or so. 

0 Kudos
Highlighted
Senior Contributor

Re: Second wave of down economy

Maybe it's time for another stimulus.

0 Kudos
Highlighted
Senior Contributor

Re: Second wave of down economy

I"m not sure about boomers downsizing.  They may say that, but then you see that they sure need one or even two extra bedrooms for the kids and grandkids.  And they may decide after all these years that the other snores too much and they each need a bedroom.  And she needs a sewing room and he needs a place for his hobby or craft.  I think they just spread out.  If they change houses, I think many of them still want lots of room.

I agree with you that when they move to the care facility they downsize, but that is 10-15 years down the line for the boomers.

0 Kudos
Highlighted
Advisor

Re: Second wave of down economy

Teh wad of my generation retiring and pullign Social Security payments is the one that will choke the country.  I've said for twenty years or more that I never expect to see a real benefit paid to people who have saved all along...the ones who have blown it will continue to soak the system.  I think a means test will be invoked someday, and that day is not so far away. 

Otherwise, let's stop blaming Boomers for being born...like we had a choice in the matter.  What will happen with houses is that the ones who cannot sell for their necessary asking price will stay in place and the neighborhoods will deteriorate. 

That has happened repeatedly in American housing for centuries now.  I take college courses in historic preservation technology for fun, and it's an intriguing subject. 

Most really notable historic homes have passed into public or foundation ownership for upkeep.  Many of those are in trouble financially now.  Others generally fell into disuse or ghetto-level rental housing, mostly with absentee landlords.  A round of them used to get gentrified in many cities every so often, as an older district turned trendy.  Shockoe Slip in Richmond was a prime example in the 1980s. 

The tax credits and other incentives to restore historic homes and whole historic districts in American towns and cities salvaged many more.  That sweet lure has really declined, though, and restoration now is in trouble, I think.   You truly have to love older structures to go to the trouble of making them useable again.   We do not like to rough it as much as we may think we do. 

Mike and I remodelled an empty c. 1900 house on this farm when we bought it.  (As far as we've been able to tell, this place was abandooned for living purposes for about forty years before we bought the farm, so, cas in point.)

Old houses can be money pits, if you allow them to be.  Fortunately, as farmers, we have a lot of DIY skills and seasonally have time to expend, and reared a son with madly good skills in building.  

We made a conscious decision in 2010 to "age in place."  That is, at age 56, we chose to make some additional investments in this house to make it safer and sounder for the duration of our lifetimes.  I did some research on the subject, and we factored in a lot of issues. 

We agreed that we still will want to keep active pets that need land to run on, and will not want to be up under but so many people.  Remote monitoring devices do help elders stay put now, too.  . 

Our daughter and SIL live at the other end of the farm, so we are not here alone.   It's six miles to a village with a decent grocery store and gas stations in either direction.  Sheriff's office is five minutes away, and VFD is two.  You can drive further than that in many large cities for the same services, and have none fo the peace and quiet we enjoy here. 

It is close enough to the county seat and a bit further to two towns large enough to support services such as community colleges and small hospitals.  For anything truly medically serious, they med-flight you to Raleigh, Greenville or Richmond, depending upon the required specialty, I think.  I've been told it takes fifteen minutes roughly to get to any one of those major medical centers by air ambulance.  Again, traffic can hold you up longer than that if you are only a few bocks away in the city. 

Let's be honest...we sat in elementary classsrooms with 42 kids in them...and this damned state mandates no more than about 20.  The teacher's lobby has done its job of protecting its members' jobs and benefits all too well.  We cannot afford this level of luxury anymore....I am never sure we truly could. 

Boomers have funded the "Golden Years" of the WW II generation of retirees.  If not for so many of us, they might not have had the revenues to ride around in those giant RVs on deisel that cost less than a buck. 

0 Kudos
Highlighted
Veteran Advisor

Re: Second wave of down economy

Only stimulating I get is from coffee! HE HE

0 Kudos
Highlighted
Veteran Advisor

Re: Second wave of down economy

Kay said: Boomers have funded the "Golden Years" of the WW II generation of retirees.  If not for so many of us, they might not have had the revenues to ride around in those giant RVs on deisel that cost less than a buck. 

A very true statement. I think the great downfall is that boomers (folks  my parents age) looked at their parents and thought this is how retirement should be. Their parents retiremnet and along with that life expectancy and quality of life were largely cost shifted to the future generations.  My wifes grandpa died two year ago. The fall before he passed we talked about this subject he said that his life was better than any before him or coming after. Because his generation took from those on both sides to fund themselves. He was 84 when he died.  Wise man.  I have one grandparent alive still I love her dearly but she is sure what she got was because of her and not all the others before and after. 

We purchased our farm from a fellow who wanted to retire. He worked hard all of his life He owns some land that we also rent. Iowa land isn't cheap and we paid pretty good for our piece of it. Since his retirement 4 years ago. he has had a new hip, two new knees, and a new shoulder.  You and I have paid for all of them. 

0 Kudos
Highlighted
Senior Contributor

Re: Second wave of down economy


@JIM Meade / Iowa City wrote:

I"m not sure about boomers downsizing.  They may say that, but then you see that they sure need one or even two extra bedrooms for the kids and grandkids.  And they may decide after all these years that the other snores too much and they each need a bedroom.  And she needs a sewing room and he needs a place for his hobby or craft.  I think they just spread out.  If they change houses, I think many of them still want lots of room.

I agree with you that when they move to the care facility they downsize, but that is 10-15 years down the line for the boomers.


I won't disagree with what you say Jim but not all will be able to stay put. Some where I read that 70% ?? will not have their mortgage paid off when they turn 65. Can not find that article now but think it refered to Canada. The article was also pointing out that many had little extra set aside and they needed and expected their house equity to be their retirement plan. Those houses will come on the market. 

0 Kudos
Highlighted

demograpics

Hi Canuck,

 

I am still awestruck at how stupid we are.

 

The fact that a great demographic turning was due to begin right about now has been known for decades.

 

After the end of the Cold War, we had as great of a setup to prepare for it as we could have ever asked for.

 

Instead, we continued to spend ourselves into oblivion to maintain empire. Instead of rewarding saving we rewarded borrowing and spending by creating phantom asset appreciation.

 

We did nothing to keep medical costs from making us uncompetitive at all levels (federal, state and local government, private enterprise, except for medical enterprises). We could have been laying in real surpuses for social security (not just the one or two years of phony unified budget surpluses).

 

We are a dumb bunch who deserve the politicians who got us here.

 

Best, h

0 Kudos