Our Recession Experience Thus Far – Some Up, Some Down
I’m not an economist, so I have no idea if what is going on with the US economy officially qualifies as a recession. But the word is thrown around in the news endlessly, so I might as well use it.
We’ve observed two different phenomena in our financial lives regarding prices since the recession, or whatever it is, began. One is the steep drop of prices of some things, and the other is the exact opposite – a steep increase in prices. Depends on if there is competition afoot, I think.
For example, we’ve been pricing new windows for our combination playroom/office for the past two years, ever since we moved into our house. We knew moving in we would have to replace these 5 windows (they are the original single pane wood windows that were installed when the house was built over 40 years ago, and are not in any way, shape or form energy efficient). We’ve had several estimates done over the past two years, and the latest one, done by the company that is repairing our rotting porch beam, was the lowest yet. And not by a little, by a lot. Further investigation showed that this wasn’t a fluke – re-estimates now by the same companies who estimated two years ago are also lower than what was estimated then. To get business in this competitive environment, the companies are dropping their prices.
On the other hand, our local zoo just opened for the season this past weekend, and when we went for our first visit of the year, I found that not only is the admission price significantly higher, the cost for season passes is also much higher. Our season pass runs for 12 months from purchase, and since we purchased ours in June originally, we don’t have to renew it just yet. But when we do, we’ll be paying over 30% more than we paid for the pass last year. And we will renew it, for we visit the zoo almost weekly (if not more often) all summer and fall, but I must admit I was a little shocked at the huge percentage increase in cost over a single year.
What’s more expensive where you are? What’s decreased in price as the economy weakens? My spouse isn’t getting a raise this year (excellent performance review aside, his employer has a 12 month salary freeze in effect right now) so we’ll be making do with what we already have. Hopefully not too many more increases in our future!
April 20th, 2009 at 1:28 pm
I’d call the zoo’s membership office and ask them if they can cut you a deal. Our zoo had prices go up. but offered a better rate to returning members. The worst thing they can say is no, but it’s worth the asking.
April 20th, 2009 at 2:28 pm
The place I have noticed the biggest increase in price is, without a doubt, the grocery store. My husband and I love DeCecco pasta, for example, but in the last few months, we have watched the price at Wegman’s steadily increase from $1.25 to $2.49 a box. Other items up in price are milk, some veggies, and meats. So, to combat this, I’ve taken a tip from the power of small and started making small changes to my shopping routine. For example, I use coupons, buy store brands, and plan a menu for the week and make a list from that.
April 20th, 2009 at 2:32 pm
I had an interesting experience with my lease renewal for my apartment this year. Last year they tried to increase the rent by $100 a month and I protested so loudly, they gave me a $50.00 concession. So, I was very nervous for my renewal this year. However, a few weeks ago I received a letter from the management company advertising a stimulus plan of their own. For a limited time, residents could lock in their current rent for up to 15 months. This is unheard of in my city where people have been coming to live in droves in the past. I do notice that there are quite a few empty apartments here, so I guess management wants to keep the current tenants, at least.
The other biggie I have seen is a brand new “lifestyle center” mixed use residential/shopping mall going into foreclosure. This is a beautiful place in the Hill Country close to Austin that just opened a little over a year ago.
April 20th, 2009 at 3:08 pm
Its funny you should be talking about this because just today I asked my mother if she has done any online shopping recently.
I had recently placed an order with JcPenney, not only were the dress pants I ordered marked down $20, i received them in two days and I only paid for the standard shipping!! I thought it was just a fluke, but I also ordered some jeans from my son from American Eagle and they also arrived in two days.
I wondered if less people are shopping on line or if they are just trying to provide better service. Where I live it is not unheard to wait two wks to receive a package!!
tina
April 20th, 2009 at 3:31 pm
Hmmm. Our local grocery store is having pretty amazing sales, but there seems to be a bit of an air of desperation there. I know several clerks have had their hours really cut back. Worrisome.
OTOH, sales tax has increased 1%, so we are now locally paying 9.75% ! That hurts.
April 21st, 2009 at 5:50 am
A grocery chain in our area advertises it has cut prices on 10,000 items. Meanwhile, the state is about to jack up sales taxes (which already are at 8.3%) and add a state property tax to the existing county tax.
Cars are way down, but five-digit prices are still too high for most people to consider. In some parts of town, housing prices are in the basement; in others, they’re starting to creep back up.
Prices are going up on things you can’t avoid paying for, such as water, electricity, natural gas, and taxes. And they’re soaring for any service provided by a government entity, such as tuition for our state universities. If it’s something you can do without, though, merchants are having to drop prices.
April 21st, 2009 at 2:12 pm
Funny about Money – “Prices are going up on things you can’t avoid paying for.” You took the words right out of my mouth.
The subdivision I live in has an annual Home Owners Association Fee that is ran by a third party company. It’s total bs – they collect over 70,000.00 dollars a year off my neighborhood alone and literally do nothing for it. Yet – they increase the fees a little bit every year. I honestly expected them to hold off on the increase this year in light of the economic climate and the fact that gas and labor (I guess they do mow a couple of small areas) is cheaper now than it was this time last year. I should have known better… This year was the single largest increase in the the past six years. There is nothing I can do about it short of getting the entire neighborhood to throw a fit. They know that. They know it’s not going to happen and if I don’t pay it they will hit me with late fees and place a lien on my home.
I hate them.
April 21st, 2009 at 4:41 pm
Services are going down – such as contractors, handy-men, lawn services.
Full sized truck prices are down (I took advantage of that) but not smaller cars.
Houses (in our area) are finally dropping back to a reasonable level – slightly above 2 years ago, but not to the one year ago out-of-sight prices.
The local taxi is offering $5 rides in town only (very small town) for this month and using a small car instead of the van.
Car washes are less money – not that I pay for something I can do myself unless it’s a school or charity drive car wash.
Appliances seem to be down in price.
Groceries? Seems to be up and down depening on what you are buying. Soda pop is out of sight – I quit last summer when the last price increase hit.
On the up side, the county raised permit prices by 35% across the board for all permits, including building permits… that’s a hefty increase! And yes, my water/sewer bill basic charge increased. And, not that I want to mention it, but gas seems to be on the increase again – up 20cents in 2 weeks – now at $2.24 in our neck of the woods.
April 22nd, 2009 at 4:54 am
It’s tough for me to say beyond groceries and gas. We cut our budget back significantly so this is all we buy. We do budget for blow money and that allows us to eat out once a month.
Restaurants are offering pretty good deals now. Applebee’s has their two for $20. I think that may even include a drink.
The grocery staples of milk, bread, and eggs have gone down. Milk used to be $3.99 a gallon and it is now back down to $1.99. That includes butter, it has gone down in price by 50% too.
April 22nd, 2009 at 10:22 am
Well, its seems like you have two very different things that you’re comparing.
With the windows, as the industry develops and becomes for mainstream there is probably an economy of scale and efficiency improvements that go into the price drop.
With the zoo, you’ve got a non profit that is seeing their costs go up while membership is, undoubtedly, dropping because of the economy. One way to make up the difference is to raise prices. Sadly this is the route that my homeowner’s association took in the wake of a slew of foreclosures in my neighborhood.