It starts to be seen...

Last September/October everywhere I went people were discussing the economy, in the packed restaurants, in the full stores, people were splashing out credit cards and talking about the economic collapse. I said to DH, I hear about it, but I don't see it. And he said, wait till Jan.

Well, it's early Feb, and as I walk around Tribeca, it appears thriving, there are well dressed children on the streets. The restaurants are still reasonably full, though there are articles appearing saying that they've lost 30% of their trade - and knowing how thin restaurant break evens are, that 30% was their profit...

But as I walk down the side streets, all those weird, sweet boutiques, who sold hand bags and shoes for ridiculous prices, one by one they are closing. Along Duane and Reade, the two prime Tribeca streets, loads of foot traffic, loads of exposure, stores are empty. Further up, on Hudson, store fronts are papered over, looking like they are planning to be empty for some time. I feel for those small shop owners, whose product was all cream - no necessities, only luxuries. The girls clothes shop on Duane is now telling customers to gather their friends and bring them in, otherwise they will close too.

And I think about how the rents have almost doubled over the past five years, which is what is really killing these shops. I only hope the store owners have the sense to see that not many folk are going to be opening new boutiques in the near future, and it may be worth their while to take in a much reduced rent - cover the taxes and common charges - rather than leave the stores empty. I guess as they see more shops empty out, their perspective too will change.

Everyone was making so much money for so long, they lost sight of how crazy the whole thing was. Rents really need to drop here, go back at least 2 years worth of over pricing, but probably even 5. Then everyone will have a bullet to bite. But as I keep saying if you are planning on staying put, the real estate can fluctuate, but you'll end up okay. Or if you sell in a bad market, but also buy in bad market, you can still do okay - as long as you bought 20 years ago and a mortgage doesn't factor in!