12 seconds ago 2009-11-24T22:30:46-08:00
Unemployment is at the highest level in decades. Housing prices are continuing on their downward spiral. Even rental apartments are sitting empty. And yet...
A new NYT/CBS News poll finds that more Americans are optimistic about the economy and the direction of the country. The poll didn't ask the respondents how they came to this unusual conclusion, but according to CNNMoney, a growing number of economists actually agree with them. Their reasoning: Joblessness, home prices and stocks have essentially hit bottom, so there's no place to go but up, right?
Sure it sounds a little bit like re-arranging deck chairs on the Titanic, but there are, in fact, some bright spots on an otherwise gloomy economic horizon.
Housing: The mantra behind every successful real-estate sale has always been "location, location, location." But in the current recession, that "location" has turned out to be the reason home prices are circling the drain. However, there are tentative signs that the hardest-hit spots may be turning around.
Florida, California and the Las Vegas area are well-known as the ground zeroes of the housing bust. But BusinessWeek is reporting that home sales in some of these areas are actually surging as first-time buyers are taking the plunge, thanks to plunging home prices and low interest rates. Speculators looking to invest are also snapping up foreclosed properties.
Employment: Yes, unemployment has hit its highest level in more than two decades, but more and more employers are looking to the long-term and doing everything they can to avoid layoffs. In order to cut costs, companies are freezing salaries, cutting back hours or temporarily halting 401(k) matching. But some employers are recognizing that laying people off will actually cost them more down the road when they have to replace those workers. From AP:
"If you overshoot on the downside and lay off workers, it puts the company at a disadvantage when the economy comes back to life," said Sean Snaith, economics professor at the University of Central Florida.
But if you do get laid off and you just bought a home, you might actually be in (a little) luck. Some builders are now offering "layoff insurance" to new home buyers. AP reports that Lennar Corp., a major U.S. builder, will cover the mortgage payments for up to six months if a buyer loses his or her job within two years of purchasing their home.
The perks: Now is definitely a good time to be a consumer. As retailers and businesses are forced to tighten their belts, many are doing everything they can to get people to buy buy buy. Can't afford happy hour anymore? One enterprising D.C. clothing store is luring customers with free beer, scotch or soft drinks while they shop. Even colleges are getting in on the game: Some private colleges are now slashing their tuition to compete with much-cheaper public universities.
Southwest Airlines, known for its "cattle call" seating and cheap flights, announced it will now be flying in and out of New York's LaGuardia Airport. JetBlue's "Promise Program" will refund airline tickets if you lose your job after booking a flight. Mainstreet.com reports that many businesses -- gyms, cable companies, even automakers -- are offering refunds or reduced fees for the recently unemployed.
Make no mistake -- the global economic situation is dire and this recession won't end tomorrow or next month. But despite all the grim news, maybe all those "optimistic" folks that were polled are on to something after all.
-Lili Ladaga
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