"Survivor Island, The Hamptons" Sales of $1M plus homes down by 55% from July 2005 in California!.

Maybe a Million Dollars IS what it used to be.  Check out these stats on home sales in the Hamptons.

According to MDA Dataquick sales of million dollar plus homes in California in 2008 was less than half number of 2007 (55% less) and 30% less than in 2004. My guess is that the year 2009 will see even fewer Macmansion sales.

If California leads the country in millionaires then the rest of the nation will see the same shift.

From: LuxuryBrokers   Listed at $19.5 Million (not for the faint of heart)

This leads us to a obvious question: if there are many fewer folks buying (or able to buy) these Macmansions, what happens to them when the banks own them through foreclosures.

A few suggestions:

• The bank owning them should present them as bonuses to executives. The banks can then recover any loss by listing them at the foreclosed amount (not the market amount) to the recipient
• Turn them into lavish branch banks to serve the currently wealthy in the neighborhood. No problem knowing who still has wealth, check to see if the taxes are paid to date.
• Convert them into company housing. This was common practice in the 19th and early 20th centuries. No reason to reinvent the wheel. Offer company script again instead of wages and let tellers and clerks rent the space. (Add vending machines and charge for other amenity use like the pool or sauna.
• Convert them to private hospitals for those with cash or select health insurance carriers. This will cut down on commuting time for Dr's. if the macmansion has a golf course just page her in.
• Ask ACORN to convert select mansions to brothels. Pay off the local law enforcers with sweet deals on other homes in the new "hood".
• Turn them into luxury hotels, resorts, retreats. This is already being done. A colleague stayed at a WAMU (former bank) macmansion that was used for bank executives and is now open to other private companies for rentals.
• Deconstruct them and use the salvaged materials to build entire villages in developing countries. This will create construction jobs (sort of) in the US and abroad. If we get ahead of the curve on this new industry, we can send contractors to Russia and China to do the same, but the salvaged materials will stay in those countries for low income development.
• Downsized shopping malls for those left with purchasing power. With less buying, retailers will need less floor space, a 50,000 SF macmansion/mall, with pool and valet parking might be more economical than a 2 million SF mall in the suburbs.
• With NO apologies to Mark Sanford, let politicians use them as free-trade zones for importing their Argentine mistresses without fear of the paparazzi. They are in gated communities usually, aren't they?. This way our tax dollars stay in the U.S.
• Convert select gated communities to public parks. Eventually the lack of taxpayer concern will cause the macmansions to become derelict eyesores and crack houses. Then burn them down and let the grounds return to forest (reducing green house gasses and slowing climate change). This is the current method if deaquiring parks buildings in California.
• MY FAVORITE: More reality shows. "Survivor Island-The Hamptons" where contestants have tribal council around the indoor fireplace and contests take place in the "game room". Maybe now is the time for the ''New Beverly Hillbillies". This was potential reality show that was deemed to be in too poor taste a few years back. Let's take another look at it after "Tool Academy" has been aired.
• Suggestions Please?

Fashion Week Sept 10-17. Lots of jersey knit, cheesecloth and Snuggies.

I am clearly not fashion minded, I shop discount on line, my wife and I do however enjoy watching any show with Tim Gunn, one of the last gentleman left in any kind of media.

Following the fashion business gives me a good idea how really smart young people (my sister calls them "painfully hip")  in New York, Paris and Milan, think about the rest of us. Forget the fashion, think the business! Be prepared to hit the links in this post, because I believe seeing is believing.

Fashion week NY ain’t like it used to be.

The Spring 2010 fashions were rolled out this week at the Mercedes-Benz Fashion Week.

The economic malaise hung over the week like a storm cloud. Few shopping bags, nearly nonexistent swag bags and not even a C-list celebrity poet to close the G-Star Raw runway show (past seasons have included Dennis Hopper and Benicio Del Toro). From: LA Times

Fashion week used to be for the designers and the buyers, but over the past few years it’s about the celebrity and the wannabe celebrities and for the fashionistas to be seen. In recent years there has not been as much buying. This year has seen a return to the past. The question is:, What can we sell and at what price?

If you want to see what’s up, NY Fashion on-line helps a lot.

Check out the Subversive Jewelry line where you can buy a semi-mass produced Galileo Pendant Necklace for $960. My guess next week, its knock-off on e-bay China for $29.99. I noticed that you can shop direct and skip the middle man’s mark-up. Or are you paying the extra vig to the clothing line owners and cutting out your local business woman/man?

Lots of old stand-by (and inexpensive) materials were seen on the runway. Jersey and even cheesecloth.

Final proof that we are entering a post-consumer economy. Snuggies at fashion week on display 5 Million sold so far.

Post consumerism indicators

What are some of the latest post consumerism indicators.

Smaller homes.
Americans loose their appetite for Mcmansions

For the first time in nearly 14 years, the median size of a new single-family home decreased, to 2,215 square feet last year, from 2,277 square feet in 2007, according to the U.S. Census Bureau.

That doesn't seem like much, but in this case the market is not exactly open. Most homes are still built on speculation, most need to have a mortgage (which limits who is currently buying-teh better off) and the consumer has not completely adapted.

This summer my wife and I completed and obtained a final inspection on an 1,152 SF two/three bedroom, two bath home, with 250 SF of covered deck and another 250 SF of open deck. The kitchen was middle level, the floors were upscale as was the exterior (cedar shingles) and a hefty roof.  My wife's, comment, "I could live in this house", and we do.. Our main residence is about 2200 SF and I have mapped out where my wife and I live (along with the five cats). We live in about 1000 SF of the house. The rest is for show and to house our collection of stuff. As we are rapidly de-aquiring it will soon become obvious that we don't need the extra space. The trick then will be to find someone who needs and can afford it.

Less room to keep stuff. No problem, get less stuff, to bankers chagrin.

No credit.

Consumer credit fell a record $21.6 billion in July from June’s. U.S. Federal Reserve Bank

Consumer credit dropped to $2.56 trillion in revolving and non-revolving lines of credit, a 10% decline at an annual rate.  The amount of consumer credit has been falling for six months. Without credit card buying, consumerism is dying,  however those embedded in the system are still in denial.

Those lousy replacement jobs aren't going to get better.

So you lost your job in banking, but you always wanted to be a baker anyway. You cashed your children's college fund to go to culinary school for six months and you've opened up your cake shop down the street. But wait, where are the customers? You tell yourself, that when things pick up in  few weeks (months, years) your family will be on easy street again. Don't count on it! Small business account for most bankruptcies. Small business bankruptcies jumped by 81% in June. (FindLaw.com)

Small businesses are described as those with fewer than 500 employees. So what chance do you have with your dream job. My guess working as a baker a Sam's club if you are lucky, (benefits of a sort) or at the local coffee shop for minimum wages and no benefits.

Oh, if you are a boomer and have traded down from a $100K+ job to a $50K job, don't plan on moving back up. This is just one of the benefits accruing to employers. A rush to the bottom in wages. When things improve, you will be asked to do more. (while continually reminded of your luck to have a job).

PS. College educated youth will be shut out for a few more years. Ask your friends whose sons and daughters received their MBA's or Law degrees this year how the job search is going. Be prepared to offer condolences, and sympathetic advice that things are getting better.

Continued increases in unemployment.

No sense in belaboring the point. Just read the government reports yourself. (no media filtering)

Most indicative: The bankers are blaming consumers for not consuming enough as they blame them for consuming too much before the collapse of Lehman Brothers.

Solution: Borrow from the local loan shark, the rates will be better than the banks soon, and the transactions support your local economy, and yes, its not likely that you will get that far behind on your payments that your default will bring down the global economy.

BOGO's A sign of the economic times, frugalistas and recession redefined.

It seems that even plastic surgeons are experiencing tough times.

FOX "News"

I hardly need to comment on this "post consumer" world, consumer "sweetener" so I will blog about something else.

Current Factoids:

89 US Banks have been closed so far in the united States this year.

9.1 Million people working part time for economic reasons - like no jobs. (not considered unemployed). These individuals indicated that they were working part time because their hours had been cut back or because they were unable to find a full-time job.

16.8% unemployed or under- employed (highest figure ever)

We may already be out of the recession (I doubt it!) but I am pretty sure that my savings has not been restored to post 2007 levels, has yours? So my tendency will be to spend less, save more and be frugal.

There's a good word "frugal" M-W definition: characterized by or reflecting economy in the use of resources.

During my childhood "frugal" was always a complement, so when I say someone is frugal, I don't mean "cheap" I mean one who reflects on the economical use of resources. Thus should make sense to the "greenies" and I might be one, I have a wind turbine to make my electricity, and a car that gets 37 MPG, and I drive it less than 5000 miles per year and my flying has been reduced to a few trips per year, down from around 50 or more.

Wait there is more, in 2008 the Oxford Dictionary folks short listed the best new words in the English language and one was frugalista, defined as “a person who lives a frugal lifestyle but stays fashionable and healthy by swapping clothes, buying secondhand, growing own produce, etc.” This could become the nom de guerre of the “recession warrior" From NY Times on-line William Safire (thank you Bill)

But wait there is even more. Frugalista has been co-opted to mean a person who spends their hard earned money on new "less" expensive things. It no longer means what it did as recently as December of 2008.

Target Stores has a new advertising campaign for frugalistas, the ones who buy new stuff, not the ones, like my wife, who often shop "lightly worn" stores.

Now here is a revisionist definition. Recession: A short period in the business cycle when lots of people choose not to work and everyone stops to count their money.