How Bad Is The Economy Really?

by James & Miel on October 1, 2008 · 0 comments

You’ve probably been watching the news and are aware that congress is contemplating a multi-billion dollar package of legislation to address the nation’s financial troubles. The basic rationale behind the action is that if wall street credit markets dry up, main street may start feeling the pinch.

Well, credit markets have been tight for a while now, so we thought we’d take a look to see whats really going on with main street. By way of a reality check, we spoke with some prominent businesses in the metro DC area. Experiences were varied.

The real estate market in DC is still functioning. According to folks we’ve been speaking with, if you have 20% down and good credit, it’s still possible to get a mortgage in the District. We talked with several realtors, none of them had heard of local deals being canceled because buyers couldn’t get credit.

Some local businesses appear to be having a tougher time. We spoke with Warren Brown, the owner and manager of a chain of CakeLove bakeries in the Greater Washington DC and Baltimore areas. He’s noted that while his core sales have been strong, since June his revenue has declined by 10% and he’s had to reduce his operating days from 7 to 6 days per week in one of his DC locations.

Others have had a mixed experience. Restaurateurs Kamal and Nizam Ali, owners and operators of the landmark DC restaurant, Ben’s Chili Bowl, have also seen a drop off in sales – but a decline of only of 5% and are currently expanding their businesses to open a bar and grill adjacent to their current location. Finally, we spoke with the manager of the local DTLR – an East coast fashion and shoe store chain – who noted that sales were down by about 10% relative to last year, although no layoffs were planned at his location.

So, how bad is the economy in DC? The general consensus is that although businesses is slow, it’s nowhere near as bad as the angst on Capitol Hill might predict.

Best,

James&Miel

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