Things You Should Buy During Recession
Cash is king during any recession for a lot of reasons; not least being that it provides a welcome cushion for any temporary loss of income. If you’ve lost your job, or might, this is no time to go on a shopping spree. But if you feel secure at work and have a little spare cash, you can indeed be treated like royalty in these difficult times. Spend wisely now and you’ll save a bundle over what things will cost once the recession lifts — a day that, thankfully, may be approaching faster than you think. Some bright spots have emerged recently in areas like housing and consumer spending, hinting that the economy may be starting to bottom out. For example, sales of existing homes jumped 5.1% and factory orders rose 1.8% in February. We’re not out of the woods by a long shot. But if you have the urge to cut loose a bit, here are 10 things to buy now — before they get more expensive.
1—Fancy Threads
Just about everything you wear has been discounted. But the biggest steals are in cashmere and formalwear, according to DailyCandy.com, which tracks online pricing. Cashmere is considered a luxury staple, meaning that it is expensive but purchased consistently by a small group of relatively well-off consumers. That group got a lot smaller when the recession hit in full force last fall. By then, though, manufacturers and retailers had already committed to producing and purchasing what proved to be wildly high levels of the material given the eroding economy. Now there is a glut of stylish, high-quality cashmere sweaters, scarves and blankets on store shelves, being offered at historically low prices as retailers scramble to lighten their inventory. These prices probably will not last through the end of the year. As for formalwear, the economy sank so fast that designers were not able to tone down their styles quick enough to keep pace with the more somber mood of the country. The prices on dressy tuxedos and gowns (which will come back into fashion with an economic recovery) have been slashed about 75%.
2.Computer Memory
There was a massive oversupply of computer chips from Samsung, Micron and others on the market even before the recession hit. These are the central components in memory devices that speed up your computer and can be purchased at places like Staples and Best Buy or online. Now, with demand plunging during the recession, memory prices have gone into virtual freefall. “It’s almost charity,” says Lawrence O’Connor, CEO of OtherWorldComputing.com, which sells computer components including memory. “We’re at lows we’ve never seen before.” Standard PCs bought more than 18 months ago typically came with less than a gigabyte of RAM; they may be running painfully slow with today’s more demanding programs. Rather than buying a new computer, though, you can invest in more memory to get similar results. To upgrade to two gigabytes may cost as little as $30 — down from $100 two years ago — and could double your computer’s speed. Get up to four gigabytes for $50 — down from $200 two years ago. O’Connor predicts these prices will double or even triple in short order when the economy recovers.
3.Cameras
Most people already have a digital camera — 77% of all households, according to the Consumer Electronics Association — and since no one really needs an upgrade, camera sales have gone south as times have gotten tough. To whip up some action, manufacturers from Canon to Kodak have been offering discounts on everything from modest point-and-shoot models to high-end single-lens-reflex models (SLRs) and camcorders. At many retailers, it’s now possible to buy a point-and-shoot digital camera for under $100. Amazon.com was recently selling a General Electric 10-megapixel digital camera for $180, down 46% from its list price. Pricegrabber.com was recently selling a Panasonic VDR-D50 DVD Camcorder for $185, down 38% from its list price. Camera maker Pentax recently dropped the price of its K20D digital SLR by $200. Such steep discounts, especially on new technology, are rare and as the economy recovers you can expect camera prices to float back toward the list price.
4.Stuff for Your House
Going out of business signs have been popping up all over the country at mom-and-pop furniture stores as well as at giant home furnishing chains like Linens N’ Things, which filed for Chapter 11 bankruptcy protection last year. Inventory reduction sales on furniture and decorative items typically lead to 50% to 70% savings and give you the ability to buy at or below the wholesale price. You can also do well with second-hand goods. “A quick scan of any community’s Craigslist unearths a seemingly endless supply of high-end used furniture,” notes Dannielle Kyrillos, editor-at-large at DailyCandy.com. Some of the best deals, she says, are in high-end bedding and towels, which can be found online at her site and others like Overstock.com and OneKingsLane.com. Another broad bargain area is flat-screen TVs. A Sony 52-inch Bravia HDTV was recently available on Nextag.com for $1,650 — less than half of what a 42-inch version cost just a couple years ago.
5.Lobster
Two years ago the economy was roaring and lobster was a popular indulgence. Not anymore. Prices have dropped 30% to 50% since then as the industry has been hit with a staggering one-two punch — a bumper shellfish crop that filled fish sellers’ tanks just as the economy lost its way and left consumers feeling guilty or unable when it comes to expensive meals. At Mt. Kisco Seafood in Mt. Kisco, N.Y., owner Joe Dimauro says his premium hard-shell live lobsters now fetch $13.99 a pound, down from nearly $20. “They just weren’t moving,” he says. “Even the restaurants that buy from us were cutting back.” Soft-shell lobsters like those at Stew Leonard’s and other large food retailers fell to under $5 a pound from about $10 a pound. In recent weeks, the price has been moving modestly higher — a trend that will surely gain momentum if the lobster harvest returns to normal and as the economy recovers.
6.New Cars
There is almost never a better time to buy a new car than during a recession, and this downturn appears to be minting once-in-a-lifetime offers. “Over the next six to nine months deals will be made like never before,” says Scott Painter, CEO of TrueCar.com, which tracks vehicle transaction prices. The global auto industry is on its back. It is on pace to sell just 9 million vehicles this year, down from more than 15 million a few years ago.
Manufacturers and dealers are desperate to move their inventory. So incentives are flying. Zero-percent financing is once again commonly available at GM, Ford, Chrysler, Volkswagen, Toyota, Nissan and Mazda. Even BMW has an attractive 0.9% rate on certain vehicles. On top of that, the government has made sales and excise taxes on a new vehicle bought this year tax deductible without itemizing. The government is also standing behind warranties on GM and Chrysler vehicles, should those troubled car companies be unable to live up to their promises. In addition, it appears that a cash-for-clunkers program will be approved, giving certain car buyers an above-market value for their trade in. Aside from all of this, vehicle prices have been slashed to well below the suggested retail price. Top deals now, according to TrueCar.com, include the Mercury Mountaineer SUV at a discount of 19.3%; the Porche 911 (-10.6%) at the high end; Toyota’s Camry Hybrid (-9.4%) and Highlander Hybrid (-8.7%); and among compacts the Kia Optima (-30.8%) and Ford Fusion (-23.5%). Prices could start to firm by the end of year as weak dealers go out of business and carmakers cut back production, constricting supply in the face of likely pent up consumer demand.
