If you’re wondering, it’s still snowing here. I haven’t seen a Winter like this in awhile. In my life, this is the third one. I remember one in Montana and two in Colorado. Having it snow all the time is awesome, even if snow sports isn’t something you do. Listening to my friends who are missing the Sun, I have to agree that several days of sunshine would do the community’s demeanor a lot of good.
Over the past several weeks, I’ve enjoyed watching headlines and pundits discuss the next recession. The recent weeks have brought conversations where smart people are saying we will see a soft landing. And some are saying that we may skirt a recession altogether. To me, I don’t see where they have hard evidence. It makes me wonder who is paying them.
To stop inflation, money has to become more difficult to spend. Raising interest rates is definitely a tool that can cause this. Also, a reduction in employment (increase in unemployment) will cause the same. I can accept the argument that employment is relaxing and the tech layoffs are a sign of this. But still, the unemployment rate is very low. Even with thousands of jobs being cut, there are still thousands of jobs to be had.
So let’s talk about the supply chain, and how it seems to be mostly fixed now. Speaking with a friend of mine in trucking logistics, his business is in a lull because most companies over-ordered and are working to sell off inventory. Taking a peek at the Dow Transports chart, it appeared to mimic his experience. There doesn’t seem to be any shortages like we had in the past few years.
In general, folks are not spending like they used to. Many families have postponed large purchases and not spending discretionary money like they used to.
That being said, consumer credit card debt is rising, and where many are finding relief, meaning, spending on the card for satisfaction today.
Steamboat has seen epic snow this year. The piles of snow on the sides of my driveway are above the top of my truck. This good weather has caused a pilgrimage of skiers to my home. Ticket prices are high. Lodging is difficult to get. And there seems to be no end to the depth of the wallets of those driving cheap cars to those who drive luxury. It would be interesting to know how visitors are spending money: credit cards? cash?
For real estate transactions in the Steamboat area, they seem to be just like a year ago, except that deals now take a few weeks to make rather than a couple of hours. More property is being sold than listed. This is against national trends and uncommon in Winter, which is traditionally a very slow time for Steamboat real estate. Price drops are more common with those who want to sell making significant changes. Those who aren’t so motivated make cursory changes rather than something with meaning.
Probably the most difficult market is in mobile homes. Even though the homes are worth the asking price, the lot rent they have to pay has been increasing and making the payments of loans and lot rent difficult to make for families. The combination of rising interest rates and lot rents has made it difficult for both buyers and sellers.
Cheers, Paul