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Has the Bubble Burst?

By Gena Riede

Real Estate Broker/Owner with Riede Real Estate, Lic. 01310792

January 18, 2008 12:49 AM

Recession? The television is jumping with words of recession. President Bush today is scheduled to endorse his plan to stimulate the economy.

Supposedly, the President wants $800 for a single person and $1600 for married couples along with tax breaks to be implemented right away to stave off more economical problems.

Now, what would you do with your $800 or $1600?

With businesses closing and Christmas sales not being what businesses needed for their bottom line, President Bush thinks that by giving the American citizen a rebate, we will put that money back into businesses to help thwart off more closures.

Some of the business in the Sacramento area and Northern CA to shut down and or reduce the number of stores are:

Pick up Stix - 8 locations shut down (jobs gone)-chain from Texas
Liz Claiborn
Zales Jewelers- 60 stores
Ethan Allen
Macys - 9 stores
Bombay
Pac Sun- 154 stores
Talbots

Are stores shutting down in your area? Will you put the money that you receive back in the hands of the stores? Do you have gift certificates, or did you give gift certificates during the holidays? Hmmmm, I think I might use those gift certificates, now.

Southwest Airlines has cut 57 flights, at least 4 right here in Sacramento so if you have a gift certificate, I'd use it in a hurry.

Along with all this stimulating news of recession of course is the Real Estate market. We wouldn't want to leave home sales and foreclosures out of the mix.

Sacramento County is down $74,500 on the average home price since last year. North Highlands which is a community in Sacramento County is listed as the worst, with the prices of homes down 42%, Placer County down 16%, El Dorado County is down 7% and Amador County was actually up by 15% which amounts to approximately $16,000. Stanislaus County home prices lost $125,000 on an average.

So, what will you do with all the money that the government will send your way and is this a sign that the Real Estate "Bubble" has finally burst or that there is just less air in the balloon, a leak?

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Al Maxwell

Keller Williams - Marietta, GA

Real Estate Agent

This will be an interesting year. I hope that if it hasn't bottomed out, that it will soon.

Jan 18, 2008 12:54 AM

Katie Evans

Keller Williams - Greenville, NC

Gena, I will pay some bills!!! Save the shopping. In this business right now I have to think long and hard before I spend money on me.

Jan 18, 2008 12:55 AM

Bill Gillhespy

16 Sunview Blvd - Fort Myers Beach, FL

Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hopefully people will see this as a positive sign and help things return to normal - whatever that is .

Jan 18, 2008 01:05 AM

Roberta Murphy

San Diego Previews Real Estate - Carlsbad, CA

Carlsbad Real Estate and Homes

Gena: The bubble popped and we are mopping up the mess.

Jan 18, 2008 01:09 AM

Vance Shutes

Real Estate One - Saline, MI

Your Saline, MI Real Estate Connection

Gena,

Every time this is tried, results show that most of us use the extra money to pay off some debt - especially Christmas debt, at this time of year. So, that stimulus won't work. What really frustrates me is the "self-fulfilling" prophecy of the national media. It's compounded by our local media (print and TV) propping up the same prophecy that we're in a recession. As for me, I choose not to participate!

Jan 18, 2008 01:16 AM

Bill Gassett

RE/MAX Executive Realty - Hopkinton, MA

Metrowest Massachusetts Real Estate

Gena - The bubble burst a while ago in most areas of the country. In many areas things are getting worse. The economy is certainly in a very precarious situation right now. We are certainly teetering on the possibility of a recession. Hopefully some of these stimulus packages being introduced start to help. It may be too little too late though.

Jan 18, 2008 01:50 AM

Leigh Brown

Leigh Brown & Associates, RE/MAX Executive - Charlotte, NC

CEO, Dream Maker - Charlotte, NC

I too have quit watching the news. And as a member of the VRWC, I can't see how this is going to stimulate the economy. Not when the local news is more focused on how high gas bills are this winter and that folks who are minimum-wage single parents trying to stay off the dole are faced with $250 per month to keep the house warm. Those folks will pay their power bills-which is great, but will it jump-start the economy?

Jan 18, 2008 01:52 AM

Amy Gerrish

Realty Executives - Phoenix, AZ

Realtor - Phoenix to San Tan Valley

Maybe if they have us $20,000, I would definately go buy something;)

Jan 18, 2008 02:03 AM

Lynda Eisenmann

Preferred Home Brokers - Brea, CA

Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Gena,

Gosh, some of those businesses/stores really surprise me, we have some in my area of SoCal too. So far I haven't noticed any of them closing, yet I'm not a big shopper. I think I completely missed the shopping "gene" in my family. The only businesses I've noticed (so far) are a couple of the large r.e. offices in my area.

As for the $800 or $1,600 I would hope some would spend at least half, and maybe pay down debt with the remaining funds. So many Americans have such heavy consumer debt, that in itself can keep them broke.

Jan 18, 2008 06:42 AM

Linda Scanlan

A Fan of AR - Burleson, TX

Gena - We're probably going to have to save ours to use ON our taxes! LOL

Jan 18, 2008 07:05 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Al, me too. We could all use some good news, soon!

Katie, sounds like a very good plan. I'm sure we could all use some help with all the bills and rising costs.

Bill, yeah...what is normal?

Roberta, yes there is a mess all over the place. I'm wringing my mop out right now.

Vance,paying off debt is definitely the way to go and we've been living the self fulfilled prophecy for sometime, now.

Jan 18, 2008 03:39 PM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Bill, I'd say we are already in one and have been for awhile. If you think about it, by the time the news media releases the fact that the bubble has burst we will be on the upswing. I think that the same is comparatively true of a recession. With people out of work, businesses closing, the value of the dollar etc. it all points to recession. Take a look at how much you pay for milk this year vs last year, gas this vs last, etc. Now, we need to clean this ugly mess up and get on with business.

Leigh, no I don't think it will. I vaguely remember the last recession that we had and can't for the life of me remember how long it lasted. We need some jobs!! Got any suggestions?

Amy, what a dreamer...but it does nice. I think I'll step into that dream.

Lynda, no shopping? Good for you! Keep your eyes open to see if you end up having business leave. Perhaps, you might skate by with all the vacationers that come. Like you, I do hope that people use the money to pay off debt.

Oh Linda, why did you have to bring that up? I almost forgot...YUCK! That won't make a very big dent but I guess every little bit helps.

Jan 18, 2008 03:53 PM

Kaye Thomas

Real Estate West - Manhattan Beach, CA

e-PRO, Manhattan Beach CA

Gena- I don't see $800 or $1600 saving the economy from recession..seems like more smoke and mirrors.. Just once I would like to see the government do something "smart" instead of political..

Jan 19, 2008 05:34 PM

Kate Bourland

Marketing with Kate - Redding, CA

Onlilne Marketing Mobile Marketing

Pick up stix is gone, that's my favorite fast chinese. The very first store was build in San Clemente before it franchised. I've been wanting one up here in Redding, oh well, that's not going to happen huh?

As for the tax rebates, I think that it's a sign of an election year! they have to pretend to care!

Jan 19, 2008 10:38 PM

Jacqulyn Richey

Prominent Realty Group - Las Vegas, NV

Las Vegas Real Estate

If they really wanted to stimulate the economy, the would raise taxes on high end luxury items (things that had taxes lowered under Bush). Then use that money to pay down some of the huge debts Bush has rung up in office and even out our trade deficits. Get more jobs created by upping our exports to other countries. More manufacturing here would then create yet more jobs, and people would have more money to spend. I think most people who get an extra tax refund will simply pay it towards their credit cards, not spend it in the community. -Charles

Jan 22, 2008 09:01 AM

Mary Warren

Las Vegas, NV

Dillards Dept Store is about to go under (in my opinion). My husband works at one in Vegas (part time). On Friday he was cut back on hours, this is the 2nd cut in as many weeks. He was at 30 hours a week, he's down to 19 hours per week. Housekeeping was cut to 15 hours per week. Supposedly everyone in the store was cut...and the employees were told this cut wasn't just in Vegas but all across the U.S.

Feb 17, 2008 04:11 PM