It has been quiet around the village recently, which is odd for July. Multiple people have mentioned to me that it doesn't seem as busy on a daily basis around here as it usually would be this time of year. The weekends are still pretty busy, but weekdays (especially early in the week) seem almost hushed. I see far fewer people on the beach on Mondays and Tuesdays than any other day, regardless of the weather.
I am not sure how the island businesses are doing in general, but I have heard from a couple of people that their sales are down from the norm for this time of year. One thing which may be a contributing factor, however, is that the last two years are possibly not good to use for comparison purposes, since most everyone's revenues were higher than usual during that time period as a result of Dr. Beach's #1 Beach designation for the island.
So all of this led me to start thinking about the economy, and more specifically about media coverage of economic issues and the impact the media has. So I'm going to share my thoughts in a nutshell. Disclaimer: you may not like or agree with what I'm about to say, but I suspect you haven't seen this particular thought from another source (at least I haven't seen any media coverage of this idea, although I've seen plenty of stories about the economy, how to save money, etc). It's also in second person, so please read this as "the universal you", and don't take it personally as if it were literally about you (only you know whether it fits you or not.)
So here it is:
Unless you have lost your job or experienced some other financial hardship or change(medical expenses, new mortgage, added a person to your family, etc.) that is out of the ordinary, your personal economy has not changed (your micro-economy is stable, regardless of the state of the macro-economy). If that's the case, if you are acting as if your personal economy has issues (i.e. not vacationing, not spending the same amount as you would usually, etc.), you are letting what the media says about "the economy" be more important than what you think and know about your own economy. Doing so ultimately creates a vicious cycle effect on the macro economy: if the people who CAN afford to spend don't do so, the issues with the overall economy become worse, which means the number of people whose micro-economies are affected by those issues becomes larger, which means fewer people who can afford to spend, which means the issues with the macro economy become worse, and on and on...it's not pretty).
So now, if I've ticked you off, or if you think I'm nuts or just way off base, or whatever...feel free to fire away with your comments. Even if you're snarky about something I wrote, you won't be the first person to do that by any stretch of the imagination. You won't even be the first this week!
I really truly do hope your micro economy is stable, wherever you are...
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Musings, stories and photographs about my life on a small island off the coast of North Carolina.
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- Ocrakate
- Ocracoke Island, NC, United States
- I am blessed and lucky to call Ocracoke Island, NC home. Ocracoke is beloved of residents and visitors, and I hope this blog will be a way for folks to keep in touch with what's going on here, both in general and in my life specifically. It's a fix for your Ocracoke jonesing!
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9 comments:
I see what you are saying. I still have my job and everything but my 30 year investments have taken such a hit that I have to be more careful and think how I will spend my money now days and I have been more conservative and cut somethings out so I will not get in the same place a lot of people are. Enjoy your blog and miss when it when you don't post everyday
I hate to be the first -- I spent Sunday down the beach at Hatteras Landing. This is the first year I haven't booked my usual two weeks on Ocracoke. The reason? Simple.
While my own personal economy hasn't changed, I have watched the rental prices on Ocracoke skyrocket. I can't afford over a thousand dollars a week for a decent rental, groceries for that same week and still continue to patronize the locals on this island I have come to know and love.
It felt odd after being there twice the summer for years to regretfully have to decide to vacation elsewhere. I adore Ocracoke but since the realty companies merged, being there has become increasingly expensive.
I still do a day trip at least half a dozen times during the summer because I never want to let go of what Ocracoke Island brings to me.
The length of Hatteras Island is deserted. I was able to get a table at Hatteras Landing without even a ten second wait at 5 in the afternoon. There were no long lines for the ferries. There surely weren't as many shoppers at the Landing as I have seen in mid July in years past.
While I understand the economics of owning a home for rental on Ocracoke, one must also understand that certain things are simply a cost of doing business. Cleaning fees, booking fees, administrative fees -- which of these simply don't need to be charged? I've booked my reservation in person at OI Realty and the ten minutes that it took to do so surely isn't really worth $25, is it? I can't comment on cleaning fees as I don't know what is charged to clean each house to turn it over -- and I know I leave my rental as clean as I can make it, although others may not.
I'm very sad that I was unable to afford the island this year -- but I did choose to vacation in Florida. I have paid for an airline ticket, a rental and a rental car for a WEEK and have still not spent the amount of money I would have spent simply for a week's rental on Ocracoke.
There's something wrong with that....I'm not sure what it is and I wouldn't consider myself informed enough to comment in any depth. As a consumer though, these are the things that impact MY economy.
The one thing that I will say is this -- if I owned a home on Ocracoke that I rented out to vacationers and that house was sitting empty due to its high price? I'd rather drop the price and get SOMETHING in rents as opposed to leaving it that high and having NOTHING in rents. Now that's a simple concept.
While I enjoy the solitude and peace that the Island offers, I can only imagine what impact that is having on a place that is dependent on its vacation population.
I have seen homes that I rented previously triple in price in less than ten years time for a week's rental. Barring any refinancing or other changes in the needs of the owners, is that truly necessary? There are homes that I love that I simply can't afford and what the same amount of money is buying now is simply not suitable for my family of three.
When one can get more value for the same money, why settle for less? That simply doesn't make any sense.
I think your economic assessment is accurate. Perhaps the only piece missing is that in many cases while folks micro-economy hasn't changed, they have less confidence that it will stay unchanged. A lower confidence level leads to less spending and more saving for a rainy day.
Thanks for all the comments! I love it when the blog is a two way conversation.
To the first anonymous: you have a really good point about investment losses and saving for the future, I hadn't considered that angle. And thanks for the sweet comment about missing the blog when I don't post...it's nice to know. :)
Anonymous number two (the long comment): that was really insightful, and you also make a very good point about rental price increases. I think that one reason is that homes changed hands over the last few years, when sales prices went up insanely, so the new owners need to get more rental income in order to cover their mortgage payments. (But that certainly doesn't account for all the homes and all the price hikes.) Your sentence "I never want to let go of what Ocracoke Island brings to me" was so bittersweet in this context. It's really sad that some folks who love and adore Ocracoke simply can't come as often as they would like to (or, worse, at all) due to the increasing costs of everything, even if - like your situation - their personal economy hasn't changed. Man, it seems like we're stuck in this never ending spiral of higher prices for everything, and boy do I wish there were a way to just make it stop. :(
Tom - your point about confidence was an excellent one. The state of the macro economy certainly has an influence on how likely people feel it is that their micro economy is truly stable. And with traditionally solid, large businesses getting into real financial difficulties (think auto manufacturers), even jobs which used to be very dependable are up for question.
Scary times, for sure. I appreciate all the thoughts, and I know that the island business owners truly appreciate the people who still do come and do what they can in terms of spending. They always appreciate them, but especially so during this period when it is more difficult for so many reasons.
Anon#2, I can appreciate the difficulty in affording your vacation. I'm a second season homeowner on the Island and I do try to keep my rental rates reasonable while balancing against the the ever increasing costs of insurance, utilities, etc. Just a couple points for you.
First, about your comment about owners getting some income rather than let their homes sit empty. There really is a lower limit where it does make more sense to let the home sit empty. In addition to normal wear and tear, it does cost more in utilities, etc. when the home is occupied than when it is not. After management commissions and variable costs, it may make more sense to just stay empty. This is why many owners don't even offer their properties in the off-season. Of course, the other reason is the off-season is when we like to come to the Island!!
Second, you should NEVER be afraid to make what you regard to be a fair offer on a rental. If the agent declines your offer, you can ask that they present your offer to the homeowner. I believe that the law compels them to take the offer to the homeowner, if you ask them to. Also, the later you wait to make a reservation, the more negotiating power you have. I always expected this year to be more of a "last minute" market. It has proved to be so, for me, but, not to the extent I expected.
Good luck in the future and don't be afraid to exercise the power that you do have!
I couldn't stand the idea of forgoing Ocracoke this summer, even though I recently started a new job and my 401(k) took a major hit last year. We opted to stay with my parents at the home they rent for 8 weeks each summer and pay half the rent for that week. We were surprised by the quite nature of the village, so unusual for July. I especially love the island in September, when the crowds have gone home but it is still warm enough to go to the beach and swim. This July was similar to that time of year, but some of my favorites "The Flying Melon", "Smacknalley's" and "Cafe Atlantic" seemed to be as busy as ever.
Me again -- there is one way for the rental overpricing to stop and that is to have the owners of the properties simply say NO to increases. When some folks went over to Blue Heron Realty, that is exactly what happened -- I know that for a fact as there is a property that I rented with Blue Heron that has only increased its price by $100 per week.
It feels **to me at least, a family consumer** that it is the wealth that is being catered to when all these years, it has been families that continue to keep bringing their children back for the sweetest vacation experience ever! The older children have complete freedom to be on the island without being watched every minute -- mine loved to explore and made tons of friends to hang out with. They loved the beach and the sheer simplicity of getting a snow cone or ice cream after dinner. We listened to a lot of music by locals and loved it.
I first sest my eyes on Ocraocke in 1988 as part of a team from the Red Cross. I was there for less than twelve hours and those twelve hours have continued to bring me back to this tiny island with her lovely local people, her characters and friendly faces. I never forgot being on Ocracoke for the first time -- that's why years later, when I was able to afford to do so, I returned.....many times.
I'm really downhearted to not be able to be there on a more regular basis.....
As someone recently vacationed on the island I'll put my comments.
The only way that I can afford to come to Ocracoke and spend a week or more is to camp. Even with camping, we did our share to stimulate the economy; we bought groceries (including ice every single day!), shopped at local stores, took advantage of local services, played Bingo and even made contributions to the fire house fund and Ocracats.
I do have a job but I am a state employee (teacher) and who knows what the future holds for our state and it's troubled budget. I have to agree with the other poster who said that even those with jobs have found our investments and savings earning less and may feel that we need to conserve our money a bit.
However, I have looked at the rentals on the island and have found most of them to be far more expensive than they, in my opinion, should be. I realize that some people have probably paid too much for their property and need to get a lot of rent out of it, and that is unfortunate. But even for me, and I am fairly solidly middleclass, the rentals are out of reach of my budget.
Now, I love Ocracoke and the community atmosphere here, and I would even like to live here. But, there is no way I could ever afford to buy a house. I have a nice home with 5 1/2 acres but by Ocracoke standards I would be lucky to get a shack or a trailer. A local resident told me that there isn't any property here for sale. When I protested and said that I saw For Sale signs everywhere, he said remarked that there were plenty of properties with prices on them, but apparently no one really wanted to sell them!
So, for now and as far into the future as I can see, I will have to be satisfied with pitching my tent at the National Park Campground and enjoying my visits to the island complete with mosquitoes, cold showers and no electricity.
PS-Someone really needs to open a laundromat on Ocracoke!
Hi again everyone! Thanks for the continuing heartfelt and insightful thoughts...
Tom – thanks for the good background info. on all the considerations re: rental prices and whether to rent vs. let a house sit empty. Hope that helps folks see it from the owner’s perspective. And for anyone who didn’t catch it, read Tom’s comment for some good advice on how to possibly get a lower rate!
Kitten – I bet there are several readers who are going to be seriously jealous of your parents, being able to vacation here for 8 weeks every year! Heck, I’m jealous of them, and I live here! (A two month vacation here would be my idea of mah-velous!)
Anonymous – re: owners saying no to raising rental prices, there is truth to that, but as Tom pointed out there are certainly other costs involved (utilities, insurance, etc.) most if not all of which have been steadily increasing over the last few years. (There goes that dang vicious cycle of prices constantly spiraling higher and higher again!)
Debbie – thanks for doing all you could to stimulate the island economy! Camping is certainly an affordable alternative, and is the only way to have the ocean right outside your “door” (if you camp in the NPS campground near the beach). I actually would love to sleep at the campground sometime, just so I could hear the waves all night. If there were a magic way to get rid of all the mosquitoes, it would be absolutely perfect bliss. :) By the way, you’re not the first person I’ve heard talk about the need for a Laundromat on the island, but strangely enough there was one several years ago which didn’t do well enough to stay open, unfortunately.
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