Luxury Items Decrease in This Bad Economy
December 31st, 2009 |
If there was ever a time that was hard on luxury items from watches to five-star hotels this would be the time. The economy worldwide is seeing a transformation of epic proportions in which all markets are going down. Many times one economy will start decreasing while other countries’ economies start rising which helps mend the faults in the markets. This time the whole world’s economy seems to be decreasing at the same time which puts a huge stain on things that are not needed such as luxury items.
Being someone who writes for a luxury publication and website based in Miami Beach there are still many cases of luxury stores and hotels doing well here which shows no sign of slowing down but this is one of the only areas in the world that is still seeing any type of stability. For instance even a few hours north in Florida there are areas that are seeing record unemployment and foreclosure where before they were seeing luxury items spread wide.
The luxury market for items such as Rolex’s has gone downhill as expected and it usually does go in cycles but what is alarming is the amount of luxury real estate and hotels that have vacancies. Many of these multi-million dollar homes were built during times when the markets were up and many people were making large salaries. In the past few years now the average salaries have sunk to new lows in many of these areas which have experts asking if these homes will ever be filled.
The real estate market may just be in a slump and recover once the economy does but the question keeps getting asked over and over of who will fill these thousands of houses who are more than the average person could ever afford. Also the problem created in housing markets in such places as Los Angeles is the problem of people downsizing and selling off their third of fourth home.
It will be tough for the luxury market to recover anytime soon but it may do something that is much needed in the luxury market and that is a redoing of pricing. The inflated prices were no problem for the many of super-rich who now cease to exist. For those in luxury real estate markets they will see a hit but with the new stimulus package being passed it could be great for mid-range Realtor who should see their clients start sky-rocketing as tax incentives will be introduced. Many luxury hotels will see a hit as companies downsize as well as they have relied for years on many business travelers who don’t care about pricing as they are using a corporate account. In my opinion the luxury industry will be a down industry for two or three years but will recover as the world’s economy hopefully gets back to its feet and beats this new economic downturn due to globalization and other factors.
Brandon Jonson is an associate at The Sayre Group a online reputation management and monitoring company. In his spare time he writes about personal and identity theft protection for high profile individuals where he does Lifelock reviews and many other product reviews to help people protect themselves when they are being targeted.
