Coffee Talk Time – Uncertain Times Edition

I’ve just moved downtown (renter) and the only changes I’m noticing are more graffiti around town. Also, I am looking to eventually build a house on an infill lot downtown and those plans have not been halted.

I can tell you that my business has slowed, and from what business I am getting, the clients are very budget-conscious these days. If I cannot fit my decor items in their budget, then I don’t get the project. My day job was outsourced in December, and I am having to cut back. So I don’t get to go to lunch in Bricktown. And I have to have a reason to go Downtown, instead of just going to “drive around” seeing the changes.

Yes, layoffs are happening in OKC, and many of them are not being reported by the media. The recession IS hitting OKC. There is no doubt about that.

My dream is to have a combination residence/business downtown, but I don’t have the capital. If I did have the capital, I would need enough to ride out this downturn, as well as the coming traffic nightmare when I-40 construction proceeds East of Western.

I do believe the economy is down in OKC, but I don’t like the CNN/MSNBC crowd driving people to panic. There are ways to survive, and I’m not too proud to do what I need to in order to survive. Yes, it will put my dreams on hold, but the sun will come out tomorrow, and OKC will ride this one out better than we did in the ’80s.

Steve, I’ve been bothered by our city leaders continually trumping OKC as “immune to the recession.” We are not, and we will get hit. And soon. I’m trying to get my workplace to understand that reality is different for others right now, but it will soon hit our doorsteps. Personally, I’ve been wary of large purchases and have been controlling my discretionary income more so than before.

As a downtown owner, I’m not concerned about my investment, however if I was purchasing one of the newer developments, I’d want it at a lower price than they were originally asking due to the current state of the economy. I’m not too concerned about downtown just yet, but we’ll see how things progress. I would say most developers are somewhat cautious, look at Grant Humphreys, he’s obviously holding off on his FlatIron and River projects to see what the economy will do before he starts. As John stated, the sun will come out tomorrow and we’ll ride this out much better than last time.

As for my company downtown, things have definitely slowed down, a little from the economy, but mostly from things out of my control.

As far as the “cable news media”, I would say it is the media at large, including local tv and print media that are doing the fear-mongering and reporting fluff. Not necessarily you, but the media at large.

I heard someone mention that as long as OKC continues to be a strong market relative to all the other markets it will be in a great place when the depression starts to end- That is, projects here will be seen as safer investments than anything in the really hard-hit metros.

We just really need to hope that oil and gas prices go back up over the summer.

We have to remember that Oklahoma has not been hit as hard by the economic downturn as other areas in the country. If you are confused by all the spin out there in the media, just look at the facts. In the US, the unemployment rate is 7.5% and we lost over 600,000 jobs last week alone, the highest number in 26 years. Major retailers are going out of business (Mervyn’s, Linen’s N’ Things, etc.” and many are on the brink of bankruptcy (Dillards, Ann Taylor, etc)

My brother lives in San Francisco and he says he has noticed within the past year by just walking around that many independent retailers have shut their doors.

So while some in the media may “sensationalize” the troubles in the economy, the facts do point to the conclusion that the economy is in very bad shape right now.

well as already report on several OKC sites, there have been several projects put on hold because the bank want to hold on to quote “their money” Hmmmm now lets see where did their money come from? Banks in this region have always been conservative with the money… often downscaleing proposed projects makeing the proposed projects boring and set for failure. It has been my premise with many of the Oklahoma Bankers that if you allow first class projects to occur they will be support and succesful beyound all expectations.

Oklahoma’s economy may lag behind the national trend, and our bottoming-out might not be a low as elsewhere… but the decline is real whether exacerbated by the media or not. (Early on the media DID wave some unnecessary red flags, and I think did contribute to the slope of the downward spiral.)

Everything will slow down in OKC. Three people were laid off in my office last week and the remainder of us are shaking in our boots. Money that three months ago I would have spent on a night out is now going into my savings account.

Downtown won’t stop blossoming, but the frequency and rate of blossoms will definitely reduce.

I agree with you Steve and I’ve been saying the same thing for some time. The talking heads on television tell everyone that we’re in for very bad times, the public worries and stops spending money to brace for the tough times ahead and low and behold things start spiraling down as the economy worsens. It becomes a self fulfilling prophesy.

They may not have been the initial cause of the problem but through sensationalizing the events, things become worse than they might have been otherwise.

While the economy is definitely as bad as anyone can remember, I think OKC stands a good chance of weathering the storm. There are layoffs – I have a good friend who recently lost his job because of the downturn. We will definitely feel the effects, but I’m hopefully optimistic we will turn the corner by the end of year.

This is the most difficult time we’ve seen in the economy in more than 60 years. I don’t take it lightly, but I do feel hopeful about Oklahoma City’s weathering of this storm. I’m more optimistic now than I was 4 months ago. If we can hang onto energy prices > $45/oil and $5/gas, we can sustain our momentum and even see some growth through this season. If energy prices drop below those #’s for long, we could get hit hard. We haven’t been hit hard yet.

As far as downtown’s momentum goes, I think it still has a lot of strength. The NBA momentum is strong, Devon is moving forward on their phenomenal infusion of capital and the City is looking ahead at MAPS 3 with progressive initiatives that continue to invest in the urban core. So Downtown will continue to move forward and build momentum.

While one of our development projects, The Flatiron, was put on ice for 9-12 months last October, everything else is moving forward on schedule. I think this season of slower action allows business owners to take care of their business in a more responsible manner than they might have in the boom times. That’s a needed season of keeping your house in order. Some will get taken out during the downturn, but that will mostly be those with no foundation or staying power. It’s not a good time to be overleveraged.

Oklahoma City is still moving forward – slower, yes – but still relatively strong compared to the rest of the world. I’m happy to call this place home.

We are already getting hit, but not as hard as the rest of the nation…we are insulated to a certain extent by a number of factors (strong banks, a diversified economy, a housing market that never got as insane as other cities) but we aren’t an island, and the national economy does and will affect us. I think the main thing we need to worry about right now is a shrinking tax base for the city, which could put a damper on some of the projects on our wishlist, but I don’t forsee a total economic collapse on the order of what California and the industrial midwest are experiencing. If there os potential for a major collapse somewhere local, I see it in Bricktown property values, because they have been inflated for a while, and this is the sort of economy that pops bubbles.

Steve, I think the above reponses should have answered your question by now: the economy really does suck.

No doubt, Mike. And I think the details of what’s going on at my own shop are well documented.

So my follow up question is, will it get as bad here as it did in the mid- to late-1980s. I’m hearing hope from some of you that it might not.

CNN Money reported OKC has the lowest unemployment rate for a metro area of more than a million people… The economy is not that great and the market proves it. it went from 14000 plus in Dec 2007 to 7900 and change now….I think OKC could be hit hard but it might take a little longer… devon lost a lot of money but their cash to debt ratio is still good… OKC will be playing the waiting game to see if it hits here or not big time.

Steve, I was all of 6 years old during the oil bust so I really can’t even formulate a comparison.

I would agree that the economy really is bad (Not just the stock market) but I would also agree that the media has exacerbated the situation.

Grant, good to see you here. I think you’re quite accurate regarding the local economy.

Is the economy bad, or does it just seem that way?

That’s a false dichotomy. The economy is bad simply because it seems that way. There is no reason why we shouldn’t be humming along, except people are scared and aren’t investing their money. Yes, some banks made some bad investments and some housing markets went crazy, but there’s really nothing else wrong.

We haven’t run out of fuel, we haven’t suffered a catastrophic natural disaster, our factories function just as well today as they did a year ago. The thing about the economy is that it is a gauge of consumer confidence. Businesses are failing because people are scared and are not spending their money. Oklahoma banks didn’t invest poorly. The only company that appeared to have ridden a bubble all the way down is Chesapeake, and they aren’t in near the situation that AIG or GM are in.

Our economy will continue to do well as long as our confidence remains high. There’s no magical secret code that makes economies work — it is simply people working and buying things and continuing to keep the wheels of commerce turning. Eventually, people will tire of the bad economy story, the media will start to focus on something else, and consumer confidence will gradually return.