A message from Jim McConoughey, CEO The Heartland Partnership

Economic experts are sticking by their guns saying they expect to see signs of economic recovery beginning sometime this year.   You may be shocked to know that this news brings about mixed reaction from some people.  While this recession is wreaking havoc globally, it has created some pretty sweet deals for consumers.  However, once our economy rebounds, most of those great buys will be gone.  So, if you have money to buy, now is the time to spend it.

What should you spend your money on you may be asking?  Forbes.com came out with a list of the top ten things to buy before the economy improves and we took some of those items to our local market place to see how they are playing in Peoria.

Housing:
Pat McCarthy, president of PAAR, says it is a great time to buy a house.  He says this is a buyer’s market like never before.  “When you combine the prices we are seeing for homes in the area with the interest rates we have right now, this makes it a great time to buy a home.” 
Need more good news?  McCarthy says when you look back a couple years, whatever the reasonable price was for the house is what it usually sold for; but today, sellers are more aggressive and more willing to deal, meaning buyers often get a lower price.
There are also first time home buyers incentives of $8,000.  “As long as you haven’t owned in the  previous 36 months, you qualify.” 
He acknowledges home sales in this area have slowed down some from this time last year.  Overall the entire region is down about 32%, which may sound like a devastating drop, but it’s not as bad as many other regions around the country.  Houses are staying on the market a tad longer than last year and the prices have come down somewhat. That is good news for buyers.

Autos:
Rod Dixon, General Manager of Bob Lindsay Honda, says people are anxious to see the new products on the market and dealers are anxious to sell them, making this a good time to buy. He says banks and local credit unions are actively participating with low interest rates and, while they are tightening their lending practices, they are willing to lend. “If you have decent credit, you’re likely to get a loan.” 
There are lots of incentives for buyers right now including dealer and manufacturer rebates. Dixon says dealers are trying to do what they can to create activity on their lots, and that means there are some great deals in the showrooms. Inventories are high at many dealerships, but that isn’t going to last according to Dixon.  “While many manufacturers have been asking dealers to keep accepting cars, they are now slowing down the building of the vehicles.  This means inventories on the lots will decline shortly.” There is skepticism about buying cars by the public because of the difficulties the manufacturers are having. Many people are wondering if warranties will be affected.  Dixon says the government is stepping in to ensure those warranties are honored.  He hopes that will ease some fears. While nationally car sales are down by 30%, locally we are only seeing about a 20% drop. 

Diamonds:
Bob Woolsey at Jones Bros. Jewelers says it is a great time to buy diamonds.  The main reason is that wholesalers are trying to unload bigger and pricier pieces.  “Their supply is extremely high and there isn’t much demand for the larger pieces (3 ct. and above), so they are trying to unload their inventory.”  He said two years ago people were flush with cash and they were buying the larger ticket items but now they aren’t spending as much.   There is still traffic and people are still buying, but he says it is obvious they are changing their shopping habits. 
One constant is the bridal business.  “The more moderate pieces, like engagement rings, aren’t fluctuating in price as much because there is a consistent demand.”  Jewelers across the country are seeing 50-75% drop in business, but Central Illinois is not seeing that dramatic of a decline.  Woolsey mentioned he is seeing more and more people trading in or cashing in their older pieces because of the price of gold. 

TV’s & Furniture:
Paul Sherman, Sherman’s Place, believes it’s a good time to purchase durable goods like televisions and furniture because retailers are doing all they can to keep their sales at least at even while prices are coming down.  In the television market, there was a huge HDTV push leading up to the digital transition, making it hard for manufacturers and retailers to keep up with demand.  Sales of HDTVs are now slowing down  but manufacturing capacity remains the same.  That results in lower prices and good deals for the consumer.  The deals are evident according to Sherman.  “Last year a popular 42 inch television might have been around $1300, but this year you can find a similar model with more features for around $900.”

In the furniture business, retailers are looking at groupings instead of selling single items in hopes of creating better deals for the consumer. 
“If you go back a few years, we were struggling to keep up with demand and, naturally, when demand slows, we have higher inventory that needs to move.”  Sherman says today’s market place is totally different than anything he’s seen before.  He said he can go to manufacturers and tell them what he needs to do and at what price his customers will pay, and the manufacturers will do it.  “Years ago they would have laughed at me, but now they are helping.  They are concentrating on what they can do for me so I can continue to gain business.”
Sherman says consumers benefit in another way too.  “Retailers are focusing on bringing better value to customers and doing whatever they can to get noticed.  We have to work harder for your business so you reap the benefits from that.”

Vacation:
Barb Hoffman, with Suzi Davis Travel says you can thank supply and demand for vacations being more affordable these days.  Hoffman tells us this has created some healthy competition between tour operators and they are willing to deal and match prices.  They are doing everything they can to attract customers.  “I just booked a week long destination wedding for August for a couple that was an all inclusive at a nice resort for $3000.  That’s $1000 less than the normal price.”  Hoffman says airfares are also lower right now.  For example a ticket to Hawaii from Peoria over the 4th of July holiday will cost you around $635.   While some people are booking way in advance others are doing last minute trips hoping to save money and they are both finding deals.  It was a busy April for Hoffman’s company but she admits there has been a slight decline in reservations.  “The difference is that some people are cutting back on the length of their trip or those who travel often are only going twice a year instead of four times a year.”  

To view the complete article of the 10 best things to buy before the economy improves from forbes.com click here. www.forbes.com/2009/03/31/consumer-behavior-recession-business-commerce-buying.html