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Posts Tagged ‘recession’

Why is Everyone So Pessimistic?

Saturday, July 10th, 2010

The Denver Post reported last week that mortgage rates have fallen to their lowest point in 50 years. Doesn’t that mean they have fallen to well below pre-recession rates? The last time mortgage rates were this low was in the 1950s. But experts say that the falling mortgage rates will not improve the housing market much — too many people have either lost their jobs or are afraid that they will lose their jobs — so they are afraid to commit to a mortgage.

Well, what do the experts know, anyway? In March John Koskinen, the interim chief executive for Freddie Mac, was quoted in the Post saying that mortgage rates were about to bottom out — he said they had gone as low as they were going to get, and people should buy houses while they could get those rates. Well, he was wrong — mortgage rates dropped even further, to the rates they are at today.

But that isn’t the end of the pessimism we saw in last week’s Post. Yesterday an article picked up from the Associated Press argued that even though the number of unemployment applications is beginning to drop, and even though first time applications for unemployment benefits are at their lowest level since early May, we shouldn’t get too excited — it’s probably not a trend.

Maybe, but what if it is a trend? What that says to me is that the people who aren’t buying new homes now because they don’t have jobs may feel differently in another year or so, when they have gotten back to work and have another year of job history under their belts.

Why do we assume that things are going to get worse and not better? In Denver, of all places — where did our confidence go? What ever happened to that old American tradition called hope?

Tags: economy, housing market, job trends, mortgage rates, pre-recession, recession, unemployment
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Denver Commercial Real Estate Market on Slow Upswing

Friday, January 8th, 2010

I knew that if we hung in there a little longer, Denver would start to ease out of the recession. According to today’s Denver Business Journal, that is exactly what’s happening.

According to Paula Moore of the DBJ, L.A. real estate brokerage firm Grubb & Ellis has had its eye on Denver. L.A.’s brokers are predicting that Denver’s commercial real estate market will slowly start to recover this year — ahead of the national commercial real estate market, which may not start to come back up until 2011. That is not much consolation for homeowners who are still struggling with the residential real estate market, but it is good news for entrepreneurs like those of us in the self-storage industry. So cheer up, homeowners, because if business starts to improve, there should eventually be more buyers out there with money to buy your homes.

If entrepreneurs and investors start buying and renting more commercial space in Denver for businesses, that tells me two things. First, consumers must be spending money in Denver again — or there would be no demand for these new businesses.  Secondly, those new businesses will bring jobs, so Denver’s unemployment rate should go down — and the newly employed will start spending money again, too. These have to be good things for Denver’s economy. We’re still in the early days…but we are getting there.

Denver entrepreneurs, investors, operators of self-storage facilities and other small businesses, and all of our customers who want us to continue to be here providing excellent service — let’s all breathe a sigh of relief. Better times are on their way.

And, to all of those businesspeople out there who are investing in commercial real estate in order to start or expand a business — bear in mind that if you need a place to store excess inventory, supplies, and equipment, you can always come to Extra Space Storage.

Tags: business, commercial real estate market, Denver, Denver Business Journal, economic recovery, entrepreneurs, Extra Space Storage, investors, recession, self storage, unemployment
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Denver: Last In, First Out of the Recession?

Thursday, January 7th, 2010

Mayor Hickenlooper said yesterday that Denver was one of the last in, and hopefully can be among the first out of the recession.

Well. That would certainly be nice. Many of us were skeptical, though, when we heard the news. Hickenlooper says “Denver is weathering the recession better than most.” That may be so, but there are still a lot of people in Denver who are struggling, and he knows it.

But our mayor, believe it or not, is putting his money — or at least the city’s money — where his mouth is. He is starting his own little stimulus package to kickstart Denver’s economy. For two weeks in June, the city will waive construction permits for homeowners who need to make repairs. The city also plans to update its recreation centers and libraries to make them greener (more sustainable, with a smaller carbon footprint) and more energy efficient. That means the city will create jobs — at least a few, and at least for a little while. It will hire sustainability consultants, contractors, architects, engineers. Hickenlooper says construction projects and local bond projects, like the Better Denver program, the Denver Public Schools improvements, Denver Water, and FasTracks will, all in all, add at least $4.5 billion into our local economy.

Meanwhile, the mayor’s deputy chief of staff, Amy Mueller, tells us that Denver will receive $45.5 million in federal economic stimulus spending, and that $410 million more has been awarded to the Denver Housing Authority, Denver Public Schools and RTD/Denver Union Station. Well, that would be good. I hope receiving the money is the same thing as spending it on improvements, especially to make more housing available. Do you hear that, Denver Housing Authority? For those of you who do not remember, a few days ago the Post reported that the Denver Housing Authority is not spending all the money that the federal government provided to it to increase housing. It was not that the DHA came up a few dollars short of spending it all. No, the DHA had about $7 million left over in federal funding at the end of 2009.

One of the most heartbreaking things for a self-storage manager ever to have to do is to explain to a low-income tenant that no, even though our units are clean and warm and dry, we don’t allow people to live in them. And with all the money that the government is pouring into the Denver Housing Authority, it shouldn’t be necessary for us ever to have to say that. There should be good quality, affordable housing available for all who need it.

Here at Extra Space, we sincerely hope that Mayor Hickenlooper’s Denver economic stimulus plan works. It couldn’t happen to a nicer city.

Tags: affordable housing, Denver Housing Authority, economic stimulus, Extra Space, federal funding, Hickenlooper, Mayor, recession, self storage
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Why Are Colorado Public Housing Agencies So Slow to Spend Public Funds?

Tuesday, December 29th, 2009

When you work in the self-storage business, you find out how people are doing economically. In good times, people rent self-storage units because their cups overfloweth, so to speak–they have too much, more than they even have room for in their homes. In bad times, people rent self-storage units because they have nowhere to live. They put their stuff in storage. Then they go and sleep on a couch in the home of a relative or friend. It’s a hard situation–especially when you consider that some people don’t have friends or relatives with an extra couch to sleep on or the tolerance to let someone — or several someones — camp out in the living room for an indefinite period of time. This is happening to too many people these days — to people who are trying to pay off student loans for college tuition that has skyrocketed over the last 30 years, to men who are trying to make child support payments even after losing a job or after watching their small businesses decline in the recession, to single moms who are trying to pay off credit card bills working part-time while the kids are in school, to people who have had to live off their credit cards while trying to find work, to people who are trying to support elderly or disabled relatives or who have given up full-time jobs and are working part-time in order to care for relatives who need their help.

My heart goes out to all of those people, people who are all doing their best to make the most of a bad situation. Losing your housing may be the hardest challenge of all, especially for families with young children who must impose on relatives to give them a place to stay, or go to a shelter.

All that being said, I do not understand why Colorado’s public housing agencies are not spending the money the federal government gave them, to use in developing more low cost housing that could help to alleviate some of these issues. The Denver Post reported today that out of nearly $18 million in Recovery Act formula grants given to them by the federal government this year, Colorado public housing agencies have spent only $2.8 million so far.

There are only two days left in the year! When is that money going to get spent?

Other states, apparently, are spending their housing money to develop new public housing. The federal government’s General Accounting Office says that Colorado is spending federal money more slowly than the average state.

The Denver Housing Authority is moving especially slowly, having spent only $795,000 out of the $7.8 million it was allocated. It says it will spend the money by March. Well, that’s just fine, Denver Housing Authority. I’m sure that families in need of housing won’t mind making do for another three months…

Extra Space is happy to provide self-storage units for families who need someplace to put things while they stay with friends and wait for housing. We are always glad to have their business, and we won’t charge rent for storage space for the first month. Still, as happy as we are to provide storage for families, I’d rather see those families living in their own homes. I’m looking forward to the day when families need storage again because their cups overfloweth…not because they can’t afford a cup in the first place.

Tags: Denver, GAO, General Accounting Office, housing agencies, public housing, recession, self storage, stimulus funds
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