Remaining Optimistic in Iffy Times

Apparently consumer confidence dropped again this month, at least according to this article, which I must warn you is rife with complicated figures, percentages, and other stuff that hurts your eyes to look at.

But wait. Then there’s this article, which praises the benefits of keeping your faith as an investor. How dare they go and sully my pessimistic viewpoint with something refreshingly contrary! I was just getting stoked on all the negative coverage about the real estate industry and the economy as a whole, then this guy had to go write something positive. My world view is shaken.

For those that aren’t aware, the preceding statements were examples of sarcasm. We need more optimism right now. I mean, they got out of that big hole back in the ’30s… eventually. Right? There’s no way ours could get that bad. That would take something epic, like, I don’t know… the sudden bankruptcy of major investment banks. Or rising costs of oil. Or the breaking of a huge real estate bubble… oh wait.

A little more sarcasm for your digestive enjoyment. But seriously, folks. This thing’s going to bottom out and rebound. So if you’re waiting to see how low the price on that dream home of yours will go… don’t wait too long.

Optimism in the industry — will the market rebound?

There’s been a couple headlines floating around out there in the news world regarding optimistic forecasts for the housing market. At least I thought there were. In fact, I KNOW there were!

But where are those exclamations of optimism now? Buried by more pessimism, that’s where.

Here’s something nice though:

Then there’s this: An article that’s at least focusing on when and if the market turns around, without so much focus on the bad stuff.

Meanwhile, there’s still plenty of bad in the news.

A well known economist predicts housing prices will drop by more than they did in the Great Depression!

But wait. Couldn’t this all be part of an elaborate hoax? Right along with Bush’s little gift to the taxpayers, the so called “stimulus package,” all this negativity could be crafted meticulously to make us go out and buy more, spur the economy, and get our country back on track.

I guess the relationship between being bombarded with bad news, and the desire to go spend money, is something psychologists should be examining, not economists.

A Brighter Outlook

Anyone who read the post from a couple weeks ago on the state of the economy may have been sickened by the seemingly bleak outlook, and might now be thinking, “Why should I read this guy’s blog? He’s just going to talk about bad stuff that’s out of my control. I’m depressed enough already.”

Well I’ll admit, said article was a bit of a pessimistic look. But it’s not necessarily the official outlook. This week I’m looking at evidence that the economy will in fact rebound, and that even those whose livelihood is most at risk may in fact come out of this with a new-found prosperity.

Let’s start by looking at a story that began several decades ago, a story that is still playing out today. This is the story of David Pressley, the owner of this blog and the CEO of Quantum Digital, a diverse Internet company based in Hudson, Wisc.

The tale begins in rural Wisconsin. Pressley’s mother was widowed when he was only 12, which left her with the unenviable task of raising six children on her own. They eventually moved from the small town of Rheinlander to Milwaukee’s famed East Side. Not having a lot of money, many of the kids had to get jobs and eventually join the military to support the family. This gave each child a good sense of the value of hard work.

“I’ve wanted to own my own business since I was 12,” says Pressley, who always found odd ways of making a few bucks as a child before it was his turn to enter the military.

Luckily, he narrowly missed being sent to Vietnam and retired from the army after his initial contract was up.

He married his wife Karen in 1971. They moved from Milwaukee the town of River Falls, Wisc., near the Minnesota border. They both attended college at the UW-River Falls. It was here that Pressley worked at the campus print shop for a time, until he decided to open his own shop. After consulting with one of his professors, the two of them went into business together 50/50 and opened a quick-printing shop. The quick-printing mentality was to produce printing jobs at a quality that fell short of the big clunky offset presses run by traditional printers, but made up for it in efficiency and price. Pressley’s company began posting their prices at flat rates, something their competition refused and were unable to do.

Needless to say this made the printers for the River Falls Journal, the local paper, angry — so angry that the editors refused to print advertisements for the new start-up competition. This prompted Pressley to write the Wisconsin Newspaper Association and allege that the Journal was not fulfilling its obligations to the community by refusing to print ads from local competition. The WNA agreed, and the Journal was sanctioned.

Eventually, Pressley sold the business to a printer out of Osceola, Wisc., in a deal that he now believes was arranged by publishers at the Journal to buy him out. Nonetheless, he opened another shop in Hudson, Wisc., where he bounced around a few times before buying a building on Main Street with the help of several other investors. (This building is where the Twisted Grille sits today.)

Over the next decade the company, known as Copy Cat Printing,
switched to another Hudson location (where a business by the same name sits today) and opened two more shops in Stillwater and St. Paul.

In the mid-’90s, some of the other investors began to grow concerned that the company may be losing money on its St. Paul venture. Shortly after, they began to plot against Pressley and eventually attempted a hostile takeover aimed at throwing Pressley and his wife out of the company altogether. After a complex and grueling legal battle, Pressley came out on top. While he conceded both the St. Paul and Hudson locations to the betraying investors, he held on to the Stillwater shop, which had become the central hub of the company’s new World Wide Web endeavors. Pressley recognized that the Web was the future of the company, something the other short-sighted investors did not believe.

As anyone in the printing business knows, the World Wide Web has not been good for the industry. Many businesses who flourished for decades were wiped out by a drop in demand and rising prices of resources. Yet with Pressley’s foresight and courage to leap into new territory, his company, Quantum Digital, is doing better now than ever before.

They’ve diversified their business to focus on several different industries, including web design and hosting, video production, paper sales, and digital printing. The company has survived numerous recessions and shows no sign of slowing down during the current economic slump.

Despite all odds, Pressley has persevered and, so far, continues to come out on top.

So there’s a little inspiration for the self-made businessman who feels like it could all go awash in the next couple years. Indeed, it could — everything you’ve worked for could be swallowed up by the failing economy. But if you’re smart about it and look ahead into the future — not one year but several years, maybe even a decade — and base your decisions on what changes are going to occur, you’re sure to have a leg up on the guy who’s just kicking back and enjoying the ride.

Entrepreneurial-ship is not about starting a business, making money, and watching it grow. It’s about staying on top of changes that threaten to undermine your hard work, adjusting to those changes, and waiting for the next ones to crop up. Because business never stops changing. And neither should you.

Flat Broke — A Prognosis of America’s Economy

Warning: The words you are about to read may be frightening to young children, the elderly, real estate agents, recent college grads, politicians, and virtually anyone currently in denial about the ugly state of America’s economy.

How is our economy suffering? Let me count the ways. And I’ll even link to relevant data and articles demonstrating each point so you know I’m not just typing to hear the hypnotically percussive click-clack of the keyboard.

  • The housing market is in a slump… slump might be too kind a word, really.

(Come on, do I really need to cite a source for this one? Okay: Report: Housing Slump Not Over Yet)

  • According to chief economists, America is either in a recession, or damn close to being there.

IMF predicts US recession

The Market Story Stocks Shiver at More Recession Talk

  • As more flights are grounded and planes pulled out of service for inspections, summer travel is looking ugly (and our travel industry makes up $733.9 billion dollars of our economy, according to the Travel Industry Association of America)

Travelers should prepare for a rough summer

  • Oil prices are at record highs (even as big oil companies rake in record profits)

Oil prices, profit fears weigh on stocks

High oil prices help send Wall Street lower

  • The price of grain and other raw food commodities is soaring

Containing rise in food grain price is very difficult: Manmohan Singh

Producer Price Index Surges 8 Percent, Highest Since 1998

Wheat prices going up

  • Job loss is going up, and new job openings are shrinking

Pa. loses more than 200K manufacturing jobs

80,000 jobs lost; Democrats urge new aid package

US Jobs Shrink for Third Month in a Row

  • Our auto manufacturers in Detroit are suffering

Detroit spun its wheels instead of thinking small

Wary shoppers’ confidence, car sales take a dive

Slowing US economy pushes auto sales off a cliff in the country

  • Our trade deficit is getting worse and worse, and the value of our dollar in the global market is sinking (which affects other economies, as well)

US trade deficit jumps despite weak dollar

Survey: weak dollar set to drive 15,000 tech job cuts in Israel

  • Our national debt is the worst it’s ever been, and as the ongoing costs of the Iraq war continue to tally in the $2 to $3 trillion area (nearly all borrowed money), it will certainly get larger

Democrats say Iraq war hits US pocketbooks

FACTBOX: The Iraq war’s costs in dollars

Even a modest understanding of the history of economics in America should send up a red flag. There’s a good possibility the outlook is much more dire than anyone wants to admit. Everyone’s talking about recession–the big “R” word–but far less people are talking about the big “D” word (think August, 1929).

What is the difference between a recession, which we’re probably in now, and a depression, which no one wants to admit is a real possibility?

The economics portion of has a section that explains this. Basically, the difference is a matter of severity and length.

The standard “newspaper” definition of recession is a decline in the gross domestic product (GDP) for more than two consecutive quarters. Most economists do not like this definition, as it is a bit too vague and doesn’t figure in several variable elements. Hence, most economists use a different model of defining a recession, which takes into account things like employment, industrial production, income, and wholesale-retail sales, and they do not place as much weight on the two-consecutive-quarter-decline concept.

Before the Great Depression of the 1930s, the definition of depression was the standard definition of a recession today. Then the great stock market collapse happened, and to differentiate between earlier “depressions” and the new unimaginable turmoil, the definitions were updated. Now, a depression is defined loosely as “any economic downturn where real GDP declines by more than 10 percent.”

In the past, economic recovery has been driven primarily by industrial production. But we have lost 3.4 million factory jobs since 1998 — the single greatest fall in the labor force since the Great Depression (from an opinion piece at Granted, companies believe they are getting more productivity out of each employee than was once the case. Still, with manufacturing jobs disappearing and product prices rising, one must consider where this will lead us.

Remember how the Fed bailed out Bear Stearns just last week? This may not have meant a lot to people outside the complex world of economics. But according to an assessment on, this controversial bail out may have single-handedly saved us from slipping into depression. As the fifth-largest investment banker in the country, Bear Stearns pulls a lot of water. If a company that huge was that close to filing bankruptcy, so close the government had to move fast to bail them out, what does that say about the state of our economy?

This article from the Economist outlines the current economic conditions fairly well:

The American Economy, the Long Hangover

From article:“The [recession’s] duration will depend on many things, from the strength of foreign economies to the degree to which American firms cut jobs and investment. But top of the list, given the recession’s origins in the property bust and the credit crunch, are the fate of the housing market and the resilience of consumer spending. On both counts, the odds are against catastrophe but on a lasting headache.”

I will not say whether we are in a recession or whether we are headed for depression; draw your own conclusions on these issues. But one fail-safe thing to do is to start saving money if you haven’t already. And if you’re concerned about a collapse of our nation’s financial institutions, don’t put your savings in banks. And if you have enough cash to put savings away and live lavishly, please shop, buy, and contribute to the economy with confidence; when it comes down to it, that’s all any of us can really do.

Now Is the Time…

Those of us who inhabit the Upper Midwest have a rich cultural history, defined largely by the extreme bipolarities of weather we must endure–the sweltering humidity of our Augusts, the -60 degree wind chills of February, and of course the more moderate and desirable springs and autumns. So not surprisingly, many of us are more than familiar with the innate desire to some day move out of this area to a fairer and finer life in California, where the weather is (for the most part) warm, sunny, and consistent.

Well, according to an article on, the median price of homes the southern parts of the Golden State are dropping and sales are down.

Now could be the perfect time to turn your California Dreamin’ into California Livin’.

It’s not just SoCal that has prices plummeting. Median prices on homes across the San Francisco Bay Area have dropped to $548,000, down from $620,000 a year earlier.

Maybe you don’t want to deal with the overcrowded highways and smoggy skies of SoCal. And you can’t afford the costs of living in the Bay Area. Maybe you want a secluded spot where you can enjoy pristine mountain ranges, beaches that are clean and unpopulated, and the stunning magnificence of the Redwood Forest. If that sounds like you (and you don’t mind rainy winters), you might consider living in Humboldt County. The heart of it is arguably in Arcata, a progressive town (possibly the country’s most progressive town) that plays host to a small state college and a legion of retired hippies. The county’s largest city, Eureka, boasts a modest 28,000 people. The nearest metropolitan areas are Portland, San Francisco, and Sacramento, all about 5-6 hours of driving on winding, two-lane switchbacks. So if you’re not into big city life and want to be surrounded by natural beauty in its greatest form, it might be the place for you.

You can read the whole article on dropping home prices in California here.

Market for Your Market

Ideas on optimizing your target market for the current market conditions

The market is in bad shape today. But not surprisingly, some markets are in worse shape than others. For whatever reasons, Realtors often find themselves stuck working in their market area for better or worse. But if you are one of the thousands of Realtors stuck in a poor market, don’t worry. There are ways to make lemonade out of even the sourest of lemons.


For example, let’s take San Bernardino and Riverside counties in Southern California. An article from by Danielle Babb considered this area one of the worst in the country for buying homes. She cites this metro area as one of the top three worst for foreclosures in the country. Home prices are plummeting and jobs in the area are scarce.


What would you do if you were Realtor in this area? Pack up the office and move back to Los Angeles? Maybe. But a less drastic measure would be curtailing your overall marketing to focus on a more specific demographic of home buyers; in this case, retirees. Falling home prices means it’s more affordable, they don’t need a bustling job market, and since they’re retiring, your clients should be less concerned with the value of their home in a year or two than they are with location and comfort. The area is jam packed with upscale country clubs, golf courses, fine wining and dining, and casinos. The weather is hot and dry year round, which many elderly people crave, and since they’re retired, they don’t need to worry about job scarcity.


Of course there are some areas which offer very little to potential home buyers, like Detroit. The job market there has been on the decline since long before the housing bubble, the economy took (and continues to take) a huge hit from the loss of jobs in the motor companies, the weather is atrocious, and the area is overall quite depressed. Admittedly, there isn’t much advice one can give Realtors in this market except to “pack up and move.”


Featured News Story, and Rebuttal

Featured News Story:

Jessica Lange disses Stillwater in NY Daily News
Stillwater’s most famous [ex] resident spouts off about how Stillwater is no longer a “real place.”


Recently, Stillwater’s most famous ex-resident, actress Jessica Lange, shared some negative views about out little community to reporters of the New York Daily News. Ms. Lange is not alone in her sentiment. Her view that “everything gets yuppified” is truer of Stillwater today than ever before. Expensive new housing developments, along with big-box stores like Menard’s and Lowe’s and the usual suspects of national franchise restaurants, are choking out all the nice open spaces we used to have on the western hill (and choking out the businesses they compete with), making that part of town look more like a Woodbury-esque suburban wasteland than a quaint logging town. What’s more, the flashy new condos downtown, which now pollute our cityscape of genuinely antique architecture with the faux-antique masonry of which yuppiedom is made, sit largely unoccupied.

Ms. Lange is right to be upset with those developers and with our city planners for not better evaluating the market before bombarding us with high-income yuppie pods. Yet one point she makes baffles me–that “now it’s all gift shops,” referring to the historic downtown shopping district. If by gift shops you mean antiques, sorry Jessica, but it’s always been that way. And why shouldn’t it? Some of those antique shops have some really cool stuff in ’em.

Our city has held off on what I think of as gift shops–those dime-a-dozen souvenir and T-shirt shops common in places like Hayward, Wisc., or nearly anywhere else where tourists tend to flock, the ones that all sell the same customized “I got my drink on in [insert city name here]” shirts and stickers. And this is one area where I give kudos to our city planners: for keeping stores like that from turning our little river city into just another summer tourist spot.

Ms. Lange, there are still quite a number of independent businesses downtown that make our city unique: Stillwater Music, the bookstores, the kitchen store, Kmitsch Girls (a truly one-of-a-kind import store), the antique stores, several thrift shops, the co-op, a haberdashery (and how often do you see those?), several clothing stores, a liquor store, arts suppliers, a multitude of restaurants and bars, coffeehouses, a jazz lounge, two night clubs, and even a winery. Not to mention our multitude of historical sites, natural wonders, and beautiful setting at the banks of the St. Croix.

Does this sound like a town that’s been overrun with gift shops? What more do you want, Ms. Lange?

Still, there is that pesky business with the empty luxury condos. There’s also a profound lack of activities for those below the legal age of consumption. What we really need, not just for that demographic but for everyone, is a record store. Yes, the sale of CDs may be plummeting (thanks in part to iTunes), but any record store proprietor will tell you that such a business is more than just a place to by music. It’s a social setting, a place to gather, a place to find out about local events (musical or otherwise), a place to buy incense, T-shirts, posters, and jewelry. It’s also a place around which local artists and musicians would rally, and could help boost the solidarity of those in our scene.

I think back to what I once heard: that in the early days of Stillwater and the establishment of Minnesota as a state, the powers that governed our little logging town were given a choice to either host the state capitol, state university, or the first prison. They chose the prison, because it would create the most blue-collared jobs.

I believe many of Jessica Lange’s contentions with Stillwater life (and mine, as well) would be assuaged if only we had gotten the university instead.

Other real estate news stories:

Real estate players hit ice for charity

Coleman gets fearful on economy

Possible corruption in the state legislature…
Molnau sold farm near road she pushed.