With the arrival of February, we’ve passed the midpoint of the legendary Minnesota winter. It’s good to know it’s all getting better from here, but it still seems like a long wait. Fortunately, there are plenty of signs that Spring is on its way – and a lot to do on those weekends when the Mall of America is too crowded.
The Saint Paul Rivercentre has a steady parade of events that can occur every year, reliably enough to be considered almost traditional. Last weekend it was the Boat Show, and this weekend is the Home and Patio Show. The exhibits are put on by a large number of companies touting their goods to improve your home, along with seminars on home improvement and how to build green. It’s our way of looking forward to the pleasant and warm times that are coming our way.
I stopped by this weekend to see what was going on and to see how everyone felt about the prospect of home improvement. I asked one of the vendors what they thought their chances were in a recession, and the response was quite upbeat. “In a recession, people tend to improve their homes rather than think about moving,” was the answer. “We always do well in a downturn because people start to think about the Do-It-Yourself market.” As hopeful as the promise of Spring itself is the short version.
The Home and Patio show is full of ideas ranging from the simple to the elaborate. A lot of space was taken up this year by window and door replacements, obviously anticipating that energy savings would be on the mind of anyone who has paid a heating bill lately. The seminars offered ranged from simple things like painting with the latest new colors (bright is in this year) to adding on a decent sized addition. There was something for every budget, meaning that optimism in the face of a downturn may be justified.
Many of the people there weren’t as enthusiastic, however. It’s clear that a lot of people turn out just to have something to do in a nice, warm space. But that’s just part of the appeal of shows like this that happen annually. It wouldn’t have become a tradition if the exhibitors didn’t think it helped out sales in some way. Still, you have to wonder how many people are there just because it gets them out of the house.
These February events are only the start of a long calendar that leads up to warmer days. March Madness is just around the corner, the time of year when the adjacent Xcel Center hosts high school tournaments ranging from Gymnastics and Wrestling up to the big finale, Boys’ Hockey. These bring in people from all over the state to one long party that spills out to West Seventh Street and the many bars and restaurants along it. These events, along with Saint Patrick’s Day, are the real carnival that tells us Winter is nearly over.
For now, however, it’s the trade shows that come by every year. They’re a chance to get out and see a few new things as well as a tradition that helps us get through the strangely long month of February. That’s how we get through this time of year without going completely stir crazy. Well, that and thinking about a new addition when the weather and spirit move us into action in a few months. We’ve got a lot of time to think it over.
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But Erik, I want it (Winter) over NOW!
Actually, I do to. But non-Minnesotans read this, so we have to keep up appearances. You know the routine.
“Oh, ya, it’s been a long winter. But back when I was a kid, what was that, like 1968-69? That one dragged on forever. This isn’t so bad.”
(Repeat when talking about elections, gas mileage, just about anything)
Ya-sure, you betcha! Why I remember back on ’65 when it got s’cold in January, we hadta wait ’til spring for our words t’thaw t’know what we said!
Good points Erik.
Here is my take – a lot of what will happen depends on the near and long-term issue of credit.
For years, people have slowly substituted credit for actual saved cash. Consumer electronics, home improvements, cars, etc., have all become financed.
Small projects are probably within the ability of many homeowners to afford. Larger projects, for most people, were financed. HELOCs were the preferred means, since the rate was lower and the interest could be deducted.
We are starting to see a change in consumer psychology, away from large amounts of debt.
With home equity no longer being a bottomless well, there has been a noticeable spending shift.
What seem like an endless supply now must be rationed. People are most wasteful when supply is unlimited. Now they are realizing that they must eventually pay all debt back, and that the ever-rising home price is no longer their parachute.
I expect years of work to rebuild personal savings. This must happen. Since every saved dollar is a dollar unavailable for spending, prices of houses and other items are likely to go flat.
Additionally, many Americans began to see a house as the best personal savings plan, and the only one worth having. Excessive home improvements and buying more house than one can truly afford are examples of this.
The house became everything: Pension plan, ATM, object of vanity, and so on.
So since we know that personal savings are at an all time low, it becomes easier to predict future events.
If this housing bust occurred in a nation where people had tons of personal CASH savings, we could speculate on whether consumers would tap these savings in order to smooth consumption through a recession.
Since there is little savings, it is now only necessary to watch debt; both the willingness to lend and the willingness to borrow.
We’re on the verge of a generational shift in consumption and standard of living. We spent all we had and borrowed more. It was so easy, since the house kept picking up the tab. That game is over.
Where will the funds come from to pay of credit card debt, auto debt (with interest)? I don’t know. So far the consumer has been exceedingly creative in finding funds.
PB