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October 11th, 2009

“America is on Sale”

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Is cheap the new normal? At least one American business executive seems to think so. With consumer spending in the tank, retailers are doing whatever they can to lure shoppers. Personal finance gurus say there has never been a better time to be a consumer:

The Great Recession has caused massive job losses and hardship for millions, but it has also fostered a shoppers’ paradise. Anyone who still has the means to spend can find unheard of deals.

Prices on everything from clothes to coffee to cat food are dropping, some faster than they have in half a century. Items rarely discounted – like Tiffany engagements rings – are now. The two biggest purchases most people make – homes and new cars – are selling at steep price reductions.

“This is the new normal,” says Donald Keprta, president of Dominick’s, a supermarket chain in the Midwest, which just cut prices by as much as 30 percent on thousands of items. “We aren’t going back.”

While we’re well aware of the national price trends, what good are cheap prices if no one’s buying? In about a year, we’ve gone from a spending nation to a saving nation. In our opinion, it’s not because we want to, it’s because we have to. Americans have turned frugal overnight because nearly 10% of the nation is unemployed, credit lines are frozen, and our bills have piled sky high.

Despite the rock-bottom prices, many Americans can’t afford to upgrade to a flat screen T.V. or trade in their clunker for a new car. We just hope that Donald Keprta is right. If “this is the new normal,” hopefully prices will stay low and the sales will be as abundant when things truly begin to turn around for all of us.

Readers: What items have you bought recently due to the low prices?
For more ways to save, be sure to read our article “Money-Saving Websites for Almost Everything.”

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4 Responses to ““America is on Sale””

  1. Lucia Says: October 11th, 2009 at 6:27 pm

    My husband bought a boat motor on craig’s list, but we haven’t been taking advantage of sales except for buying staples and replacing clothes or tires, etc. We are still building our savings in expectation of a decline in mortgage demand next year and decreased income. However, I noticed that many shoppers are waiting for sales to buy necessities. The consumer expectation of price declines may be part of the “new normal”.

  2. Tim Manni Says: October 11th, 2009 at 9:20 pm

    Lucia,

    “The consumer expectation of price declines may be part of the ‘new normal’”: that’s a really fabulous point. And as you said, even with essentials, consumers are waiting for sales and they’re seeking them. I think that consumers are no longer going after the first price they see. They expect there to be sales, and they’re searching for them.
    Personally, I’ve found myself driving a few extra miles to shop at a discount store to get the “essentials.”

    Great comment,
    Tim

  3. Mitch Says: October 25th, 2009 at 12:51 am

    As it seems you’re indicating, it’s a silly statement. When the money starts flowing again, prices for the most part will jump again because sellers will want to buy more stuff, and to do that they’ll need more money.

    I will say, however, that it’s certainly still a great time to purchase real estate.

  4. Tim Manni Says: October 26th, 2009 at 10:25 am

    Mitch,

    I didn’t think it was a “silly” statement at all. My resounding feeling I took from it was that it’s a shame almost, since these sales are so abundant at a time when many can’t take advantage of them.

    Thanks,
    Tim

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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