21 States That Are Showing Signs Of A Recession

[gatomontes99]

https://www.msn.com/en-us/money/markets/21-states-where-recession-bells-are-ringing-after-unemployment-jumps/ss-BB1n7GNa?ocid=prnewsmsnmoney

How odd that most of shrinking states are liberal. And here is an article that talks about some of the factors:

 

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Is Boston’s Economy Doomed?

Hybrid schedules and fewer office workers are causing buildings in Boston to sit empty and property values to plummet, which could mean less tax revenue, fewer city services, and ultimately fewer residents. Welcome to the "Doom Loop." What are our leaders doing to stop it?

https://www.bostonmagazine.com/news/2024/05/26/boston-doom-loop/?utm_source=pocket-newtab-en-us

 

Unfortunately, this is happening.

 

[impartialobserver]

Remote/hybrid work is not a sign of economic demise. Its inevitable. Folks (which I am one of them) prefer less time spent in a car. I currently spend 120 to 150 minutes per day commuting. So leaders should stop this? Does not seem very democratic. 

[CdnFox]

15 minutes ago, impartialobserver said:

Remote/hybrid work is not a sign of economic demise. Its inevitable. Folks (which I am one of them) prefer less time spent in a car. I currently spend 120 to 150 minutes per day commuting. So leaders should stop this? Does not seem very democratic. 

for sure. And it hits a lot of the downtown cores the hardest because that's where the office workers used to go.

There will be a time of adaptation as they're always is. I'm sure there will eventually be some rezoning and we will see more artisan workspaces or out and out residential conversions of some of the office buildings downtown.

[gatomontes99]

1 hour ago, impartialobserver said:

Remote/hybrid work is not a sign of economic demise. Its inevitable. Folks (which I am one of them) prefer less time spent in a car. I currently spend 120 to 150 minutes per day commuting. So leaders should stop this? Does not seem very democratic. 

It is inevitable for some jobs. But what happens to the restaurants,  stores, parking, and buildings that don't have that reliable daily foot traffic? It is a sign that there will be a down turn, in part, because of the change in world dynamic.

But that is being accelerated by high interest rates. If you can't afford to borrow money to increase office space, why not just let everyone stay home and take the hit to efficiency? It is probably a good trade off.

[CdnFox]

Just now, gatomontes99 said:

It is inevitable for some jobs. But what happens to the restaurants,  stores, parking, and buildings that don't have that reliable daily foot traffic? It is a sign that there will be a down turn, in part, because of the change in world dynamic.

But that is being accelerated by high interest rates. If you can't afford to borrow money to increase office space, why not just let everyone stay home and take the hit to efficiency? It is probably a good trade off.

That would be a very highly localized downturn, and well it's not great for a city on a larger scale it doesn't really have a massive impact. The solution as I mentioned is things like moving to a more populated downtown core instead of business only. Convert some of the buildings to condos, artisan live work spaces, that sort of thing. There will always be businesses there but the day where we have to concentrate all of our businesses in the same location is probably fading

[impartialobserver]

29 minutes ago, gatomontes99 said:

It is inevitable for some jobs. But what happens to the restaurants,  stores, parking, and buildings that don't have that reliable daily foot traffic? It is a sign that there will be a down turn, in part, because of the change in world dynamic.

But that is being accelerated by high interest rates. If you can't afford to borrow money to increase office space, why not just let everyone stay home and take the hit to efficiency? It is probably a good trade off.

Its called adjustment. The restaurants will start moving out to towards the suburbs. Folks still want restaurants.. 

As for efficiency, Yes it does go down a bit when you work remotely. However, what is the benefit? Less sick leave used, more quantity of work done, and folks stick around longer. We were fully remote from April 2020 to October 2021 and so have a large enough sample size to draw conclusions from. 

[CdnFox]

13 minutes ago, impartialobserver said:

Its called adjustment. The restaurants will start moving out to towards the suburbs. Folks still want restaurants.. 

As for efficiency, Yes it does go down a bit when you work remotely. However, what is the benefit? Less sick leave used, more quantity of work done, and folks stick around longer. We were fully remote from April 2020 to October 2021 and so have a large enough sample size to draw conclusions from. 

We were doing a thread on this the other day - most of the data points to a slight upward bump in productivity rather than a loss. A slight loss was reported in some cases for full time remote  early on and even then it was noted with some tech changes that would likely go away and that it would become the norm. 

There's just too many advantages for it to not be that way moving forward. 

[gatomontes99]

1 hour ago, CdnFox said:

That would be a very highly localized downturn, and well it's not great for a city on a larger scale it doesn't really have a massive impact. The solution as I mentioned is things like moving to a more populated downtown core instead of business only. Convert some of the buildings to condos, artisan live work spaces, that sort of thing. There will always be businesses there but the day where we have to concentrate all of our businesses in the same location is probably fading

No. It is a big deal. City centers generate a crap ton of ancillary economic activity.

[CdnFox]

15 minutes ago, gatomontes99 said:

No. It is a big deal. City centers generate a crap ton of ancillary economic activity.

And would do the same if people lived there instead of worked there. 

I'm not sure what activity you thing would vanish? 

[gatomontes99]

1 hour ago, CdnFox said:

And would do the same if people lived there instead of worked there. 

I'm not sure what activity you thing would vanish? 

Some of it is in the article. The real estate in those big buildings dies. Then the restaurants, dry cleaners, parking, cabs, hotels, and so on all die with it. Then the tax revenue goes away and the city services die with it.

This isn't a small change. It is inevitable. But it is accelerated by having interest rates high.

[CdnFox]

3 hours ago, gatomontes99 said:

Some of it is in the article. The real estate in those big buildings dies.

Well as i said, not if you convert it to residential.  A few quick zoning changes and developers will be happy to do that.  We've certainly seen that done before 

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Then the restaurants, dry cleaners, parking, cabs, hotels, and so on all die with it.

If people move into those areas then most of that survives just fine. Entertainment districts for example already attract people from all over, not just people working in the core. People living in the area would still need to eat. 

There would be a bit of an adjustment but for the most part the businesses would remain, tho there may be a few less 'staples' and a few more grocery stores. And that's just how progress works 

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Then the tax revenue goes away and the city services die with it.

Nope.  Most of the tax revenue is based on the value of the real estate.

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This isn't a small change. It is inevitable. But it is accelerated by having interest rates high.

How small or large it is would be a matter of perspective i guess, but it's really not very big by any metric as long as it's handled right.  There will still be people in the downtown cores and there will still be activity. It will just change slightly while it will impact some businesses more than others it will also create new opportunity. And frankly we need more living spaces than we need office spaces right now anyway and it's a lot easier to convert an existing building than to build a new one from scratch

[gatomontes99]

Austan Goolsbee, President of the Chicago Federal Reserve Bank, highlighted that consumer delinquencies are among the most worrisome economic indicators currently being monitored. His concerns now appear prescient as new data reveal a significant uptick in delinquency rates in the first quarter of 2024.  "If the delinquency rate of consumer loans starts rising, that is often a leading indicator that things are about to get worse," Goolsbee stated.

Everything is getting worse.

7 hours ago, CdnFox said:

Well as i said, not if you convert it to residential.  A few quick zoning changes and developers will be happy to do that.  We've certainly seen that done before 

If people move into those areas then most of that survives just fine. Entertainment districts for example already attract people from all over, not just people working in the core. People living in the area would still need to eat. 

There would be a bit of an adjustment but for the most part the businesses would remain, tho there may be a few less 'staples' and a few more grocery stores. And that's just how progress works 

Nope.  Most of the tax revenue is based on the value of the real estate.

How small or large it is would be a matter of perspective i guess, but it's really not very big by any metric as long as it's handled right.  There will still be people in the downtown cores and there will still be activity. It will just change slightly while it will impact some businesses more than others it will also create new opportunity. And frankly we need more living spaces than we need office spaces right now anyway and it's a lot easier to convert an existing building than to build a new one from scratch

That transition won't happen fast enough to stop negative economic effects. In fact, it won't happen until those massive buildings become so cheap that their refurbishment and subsequent leasing is as cheap, if not cheaper, than buying a home.

[gatomontes99]

Warning Signals Are Flashing for Homeowners in Texas and Florida As property taxes and insurance costs spike, foreclosure filings are rising.

Higher interest rates are causing increased foreclosure rates.

[gatomontes99]

Astruggling housing market characterized by elevated prices and high borrowing costs for home loans has depressed demand for homes. This dynamic has contributed to a fall in the number of real estate agents working in the industry.  There are tens of thousands fewer real estate brokers and sales agents, according to data from the Federal Reserve Economic Data

[Fluffypants]

35 minutes ago, gatomontes99 said:

Astruggling housing market characterized by elevated prices and high borrowing costs for home loans has depressed demand for homes. This dynamic has contributed to a fall in the number of real estate agents working in the industry.  There are tens of thousands fewer real estate brokers and sales agents, according to data from the Federal Reserve Economic Data

I can usually can tell what industry is hurting when I am looking to hire and the last time I hired someone I was getting tons of resumes from people who worked for title companies and mortgage companies.

I am also seeing far fewer closings coming across our desks in general.

Edited May 30, 2024 by Fluffypants

[CdnFox]

2 hours ago, gatomontes99 said:

 

Everything is getting worse.

 

Sure, and that's hardly the only metric pointing in that direction. 

Everyone knew this ends in recession. It took longer to get there than some thought because of rampant gov't spending but that just makes the recession deeper and longer. Many think we're already there and they're noting that the 'traditional' recession definition may not be as relevant, if there's inflation and then stagnation of wages and such you can still have the same effect. But the economy is slowing and the impact is negative, 

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That transition won't happen fast enough to stop negative economic effects. In fact, it won't happen until those massive buildings become so cheap that their refurbishment and subsequent leasing is as cheap, if not cheaper, than buying a home.

Sure it will. There will likely be negative effects but pretty minor.  And the value of land is based entirely on what you can do with it - given the price of homes the converted residences will be of massive value so developers etc will still be willing to pay good money for them.

And as far as the gov't goes the buildings will still have to pay tax. Cities don't tax on income. 

A small number of businesses will close, there will be some loss of economic activity but it will be pretty small.  

Businesses will still need to maintain offices, they'll still have meetings and such, there will still be trade events and the like, it's not like the cores will suddenly become an unpopulated wasteland. 

The effect of the recession we just discussed will be far more impactful for the gov't and businesses. 

[impartialobserver]

Yes, high interest rates have contributed the real estate sector (naics 531) seeing declines in employment. However, past recessions have seen this and when interest rates go down (which they will).. employment recovers in most cases. the only exceptions are states that see declining population (Wyoming, West Virginia, and alabama) .

no matter what they do with the downtown real estate (make it into housing, leave it empty, convert it it retail, restaurants, etc).. what matters is that the economic output is the same. Yes, if you work remote, live in the suburbs, you will not spend money on parking/parking tickets. However, they will still want restaurants, dry cleaning, etc. All this will do is change where they spend their money. 

Edited May 30, 2024 by impartialobserver