Hot, Then Not

The classic real estate saying is “location, location, location.” The 2022 supplement to that adage might be “timing, timing, timing.”

For the last few years, we’ve been hearing about how hot the housing market has been in many places. Now there are many signs that the hot markets across the globe are abruptly cooling off, according to a Bloomberg article. It reports that increasing costs of borrowing, with central banks raising interest rates sharply to try to deal with inflationary pressures, are causing potential borrowers to think twice about paying big bucks for houses. As a result, houses in the formerly hot markets are looking at double-digit percentage declines in asking prices, and economists are forecasting a significant housing market downturn in 2023 and 2024. That’s a real problem for those people who have a significant chunk of their assets tied up in their houses–especially if they’ve paid “hot market” prices for them.

Yesterday’s consumer price index report in the U.S., which showed inflation is still far above targets, won’t help matters. The higher-than-forecast inflation numbers, notwithstanding recent declines in fuel prices, not only caused the stock indexes to tumble dramatically, it also is expected to convince the Federal Reserve to ratchet up interest rates again next week to try to wring the inflation out of the economy. That move would increase borrowing costs still farther and put even more pressure on potential buyers who would need to finance any home purchase. As interest rates rise, those potential buyers become more and more likely to stay put in their current housing and stay out of the housing market.

History teaches us that hot sellers’ markets don’t stay hot forever, and yet when such hot markets are here, some people expect them to continue indefinitely. It doesn’t take much for a sellers’ market to turn into a buyers’ market–especially if you are a buyer with ready cash who doesn’t need to take out a mortgage to make a purchase. It looks like that is the process that is underway right now, and as long as inflation remains high, that shift is likely to accelerate.

Bad Reviews

Stars of stage and screen have been dealing with bad reviews for a long, long, time. For restaurants, coffee shops, and bars, it’s a more recent phenomenon, thanks to on-line rating services. And now the ratings game is being applied to pretty much every business and profession you can think of, including service industries, teachers . . . even lawyers.

Bad reviews are so commonplace that there are collections of “hilariously bad reviews” on-line–like this one. But while outside observers might chuckle at an internet reaming, every one of those horrific reviews left a business owner, a cook, or a server really smarting, and worrying that the review will seriously harm their business. In fact, studies show that people do pay attention to reviews in deciding where to eat, drink, or hire an electrician, and a crushing comment might just make a potential customer decide to go elsewhere.

What should you do if you get a bad review? One PR agency offers tips about responding to reviews here. Their main teaching is to respond promptly and constructively to all reviews, good and bad, and view the review and response process as an opportunity to build customer loyalty and show that you value feedback. That means not replying to a bad review with flamethrower comments of your own, but instead responding in a way that shows that you’ve taken the criticism to heart, are glad the reviewer spoke up, and hope that they will come back to give you another chance after you’ve implemented improvements.

Nobody likes to get bad reviews, but it’s a reality of our modern world. My guess, too, is that pretty much every business, no matter how good they might be, gets ripped by someone who visited on an off-day or just has a negative attitude in general. Learning how to respond to the bad reviews is as much a part of operating a successful business as developing your business plan or setting up your bookkeeping system.

Life Habits Of The Rich And Famous

CNBC recently published an interesting article by a writer who interviewed 225 millionaires to evaluate their habits and analyze common themes. He found that the interview subjects all fell into one of four categories: “saver-investors,” “company climbers” who work for a company, climb the corporate ladder, and ultimately secure a senior-level position, “virtuosos” who are very good at what they do and are paid accordingly, and “dreamers” who follow their passion and do things like form their own businesses or write books.

The most common habit people in the four groups shared–besides working at something, which obviously is the basic foundation for each of the groups–was the habit of saving money. 88 percent of the millionaires interviewed said saving was a key part of their financial success. And the savings process itself involved three common themes: automatic saving of a significant part of income, investment of their savings, and frugal lifestyles. Reaching millionaire status using these techniques can be a slow process–it took the millionaires who were interviewed between 12 and 32 years to accumulate their nest eggs of between $3 million and $7 million–but the process worked.

There are a lot more millionaires now than there were during the era of Thurston Howell III and Lovey, the “millionaire and his wife” on Gilligan’s Island. It is estimated that 20 million Americans have reached millionaire status, producing 13.1 million households–more than 10 percent of the total number of households in the U.S.–that have assets of at least $1 million. About 20 percent of the millionaires inherited their wealth, but the rest made their money, in whole or in significant part, through their own effort and hard work.

Not everyone wants to become a millionaire, of course–but if you do, the statistics show that it is a reachable goal that can be achieved with work, a long-term focus on saving and asset growth, prudence, and the good luck to avoid serious illness or unprovoked job loss.

Unpaid Mortgages In China

China and its economy are notoriously difficult to analyze and evaluate. With its mix of government control and closely held data, China’s true economic performance is a closed book, making third-party analysis often seem like little more than guesswork. Reports on issues in China therefore should be taken with a huge grain of salt.

With that caveat, Bloomberg recently published an interesting story about unpaid mortgages in China that could have significant consequences akin to the subprime mortgage crisis in the U.S. that triggered the Great Recession. The real estate sector is one of the prime drivers of the Chinese economy, with construction projects and home sales being responsible for about a quarter of China’s gross domestic product, so anything that affects that sector is worthy of note.

Lately, the Chinese real estate segment has struggled in the face of a combination of issues. Developers have produced only about 60 percent of the homes they have presold to homebuyers, continuing COVID issues have caused a decline in demand for new projects, property prices in some areas have plunged, and some debt-ridden real estate developers have been unable to complete projects and have begun to default on their debts. Some homebuyers are now refusing to pay on their mortgages, either because developers have not completed the projects, or because the mortgages are for amounts greater than current property values in view of the recent decline in prices, or both. The numbers involved so far aren’t enormous, but the underlying issue is whether such a development is the first sign of a more significant trend.

China watchers are always carefully scrutinizing the meager available data about what is really happening in the world’s most populated country, and this will be an area that commands attention going forward. Our own painful experience from the 2007-2009 time period teaches what can happen when mortgages go unpaid, the real estate market craters, and what banks had considered to be assets turn out not to be assets at all. If that happens in a huge economy like China, it’s going to leave a mark on the world economy, too.

Share And Share Alike

Are there limits to the “sharing economy”?

This week the Washington Post ran an article on people renting out their backyard swimming pools by listing them on Swimply, which the article described as the “Airbnb of aquatic recreation.” The article talked about how much families enjoyed frolicking for a few hours in a nearby, rented pool on a hot day, without having to worry about the cost and upkeep and maintenance and hassle of owning their own pool. And, of course, pool owners can make a nice amount of money on the side by renting out their backyard oases.

With swimming pool rentals, we seem to be exploring new frontiers in the “sharing economy.” There have always been rentals of vacation houses; apps like Airbnb just moved the process on-line and made finding and booking the rentals a lot easier. Similarly, Uber and other ride-sharing apps built on the existing taxicab concept. But renting out your backyard swimming pool while you are there seems like a distinctly novel step. Some might say it seems to cross a clear personal privacy line; others presumably just accept it as the logical next step in our increasingly gigged-up economy.

People can do what they will with their houses–within the framework set by zoning codes, homeowners association rules, and the need to keep neighbors from getting out the torches and pitchforks, of course–and if they want to rent out their pool, why should we care? Speaking for myself, I wouldn’t want to rent out my pool for a few hours; I wouldn’t feel comfortable with it, and wouldn’t want to bear the liability risks or the clean-up duties. Nor would I want to rent some stranger’s pool on a hot summer’s day. It seems different from swimming in a hotel or country club pool; those pools are designed to accommodate visitors and are professionally maintained for that purpose, whereas renting somebody’s personal pool means you are going to a residential neighborhood, crossing a stranger’s lawn, and invading their space. The fact that you are doing so with their permission for a fee makes it legal, but it doesn’t make the concept any less weird in my view.

I wonder if there are any limits to the sharing economy. Do people whose homes have high-end kitchens stocked with the best appliances and cookware rent them out to aspiring chefs? Do people with fancy gardens offer their fragrant and flowery comforts for a fee to people looking for a new place to hold a bridal shower or a genteel tea party? Are yard tools, bicycles, lawn tractors, and family pets available for a fee?

Homes used to be viewed as the inviolable sanctum sanctorum. Now they increasingly are seen as a revenue-generating device.

Routinizing Spaceflight, And The Cislunar Void

In case you’ve missed it, there’s been some interesting recent news on the space front, in several different areas. It indicates that real progress has been made in “routinizing” spaceflight–that is, getting to the point where spaceflights have become a normal, expected occurrence, rather than a once-ever-six-months national TV phenomenon–as we get ready to tackle the next step in the development of our extraterrestrial neighborhood.

For now, the routinizing news is all about SpaceX. Today, that company is set to complete its 32nd launch of 2022, which will break the record the company set in 2021, even though the year is barely more than half over. With its fleet of reusable and reliable Falcon 9 rockets and tested launch systems, SpaceX has carried crew members and cargo to the international space station, seeded a bunch of Starlink satellites into Earth orbit, performed missions for the Department of Defense, and made forays into space so commonplace that they don’t get much attention, except from the space nerds (like me) among us.

Here are some interesting statistics: in 2022, SpaceX has launched a vehicle, on average, every 6.4 days and has taken 300,000 kg of material and people into low Earth orbit, which means that SpaceX has done more than all other countries and companies in the world, combined. SpaceX plans to make about 50 launches this year and is basically leading the way to routinized spaceflight, all by itself. That means spaceflight will become even more routine–and, by definition, cheaper–as SpaceX’s competitors ramp up their launches and activities in the coming months, as they plan to do.

This is good news, and an important platform on which to build as space development moves to the logical next step, when we venture beyond low-Earth orbit into cislunar space, which is the area beyond geosynchronous orbit out to the surface of the Moon. The White House Office of Science and Technology Policy recently issued a request for information about developing U.S. strategy for development of cislunar space, and some responses have urged that commercial entities should lead the way. That is, the governmental role shouldn’t be to do everything, as it did in the ’60s space program, but instead should be to clear the way for commercial companies like SpaceX to apply their creativity, engineering prowess, technological savvy, and venture capital to lead the development effort. With many companies focusing on cislunar space, and the government helping to coordinate their efforts, development and further routinizing of spaceflight is much more likely to happen quickly. That will set the stage for an early return to the lunar surface and the Moon bases that were forecast in 2001.

Those of us who are creatures of habit know the value of the routine. That is true for spaceflight as well, and will continue to be true when cislunar space is the focus. What SpaceX has done is impressive, but it also allows us to glimpse the possibilities.

The Cookout Cost Check

We’re in the middle of one of the great cookout weekends of the American summer season. The three-day Fourth of July weekend is traditionally a time for families to gather together, for the kids to frolic in the yard, and for Dad to fire up the charcoal and then produce hot dogs that are so burned they resemble black tubes of carbon and grossly undercooked cheeseburgers for all to enjoy.

That’s why it’s also been traditional for the American Farm Bureau Federation to conduct a market survey of the cost of items that might be part of a traditional Independence Day cookout as an illustration of food prices. The Farm Bureau Federation July Fourth menu includes classic items like cheeseburgers, pork chops, chicken breasts, chips, lemonade, potato salad, and ice cream with strawberries for a group of ten people. And this year, the news on the cost front is not good. After a 16-cent reduction in costs last year, the price of the cookout has shot up 17 percent in 2022, making the hypothetical feast more than $10 more expensive than last year.

The cookout cost check is a good illustration of how inflation is rippling through the economy, and won’t come as a surprise to anyone who has been to a grocery store lately. And of course that test doesn’t tell the entire inflationary story. Because the focus is just on the food, the Farm Bureau Federation doesn’t account, for example, for the cost of gas that would be needed to drive to the cookout.

People on budgets can’t simply accept 17 percent increases in food costs and the spike in gas prices that we’ve experienced this year; they’ve got to make adjustments to deal with the cost increases. One way to do that is to modify the cookout menu. This year, we may be seeing fewer pork chops and chicken breasts on the grill, and more hot dogs instead.

Paying For Points

I belong to many different airline and hotel rewards programs (which I am sure the rewards program pros would say is not a good approach, by the way). Lately, it seems like I am increasingly being offered a chance to buy points or miles in those programs. That happens whenever I check in for a flight on one of my rewards program carriers. Similarly, one of the hotel programs recently sent an email announcing that I can get “free” miles by buying points and then having the hotel chain match the points I’ve purchased.

The notion of buying points or miles seems incredibly weird to me–like using real money to buy Monopoly money. Sure, points can be used to buy certain things, but there always are conditions, limitations, and strings attached. Why would you want to take money that can be used unconditionally, to purchase whatever you want, and convert it into something that can be used only to buy one thing, with restrictions? My inherent cheapskate tendencies rebel against that notion. At least some people who profess to be proficient in rewards programs agree that, except in very limited circumstances, paying for points or miles doesn’t make sense. And the exceptions kind of prove my point. You need to spend a lot of time with rewards program provisions to figure out whether your circumstances justifying buying the points or miles–and who has the time to study rewards program fine print?

There’s one other thing about the buying points or miles that bugs me: the program sponsors are being paid for doing nothing. It’s no wonder that prospect of purchasing points or miles is raised so frequently. And it also seems to distract from the businesses’ attention to their core activities, too. Rather than figuring out whether they can entice me to spend money on points or miles, I’d rather that the hotel chains focus exclusively on providing clean, decent rooms in good locations, and the airlines focus on offering safe, on-time, uncancelled flights.

At The Far End Of The Comparative Pain Scale

If you’ve ever had any kind of painful injury, a doctor probably asked you to assess the extent of your pain using a smiley face scale like the one shown above. Often, quantifying pain is difficult, and you may have mulled over whether your condition came in at a four or a five on the scale.

Sometimes, though, the pain scale assessment is easy. For example, right now pretty much everyone involved in the investment world is at 10–suffering through the worst possible pain with the reddest, most anguished non-smiley face. In fact, if there were an 11 on the pain scale, like the speakers on This Is Spinal Tap, the current market conditions would qualify.

Words don’t adequately describe just how awful the investment markets are right now. Across the board, every form of investment is getting creamed. The S&P 500 has fallen more than 20 percent since January, moving into “bear market” territory, and bond prices have “tanked.” Cryptocurrencies have gotten crushed. Even good old cash in the bank isn’t safe, as inflation rates continue to climb–and the New York Times reports that the May inflation results suggest that the inflation rate may be “accelerating.”

If it is any consolation, everyone is getting pulverized. The Bloomberg Billionaires Index shows that the world’s 500 richest people have lost $1.4 trillion this year. It may make you feel better to know that Mark Zuckerberg, Elon Musk, and Jeff Bezos have all reportedly lost more than $60 billion this year. Of course, even those staggering losses leave them plenty of money to fall back on–which isn’t the case for most of the people who are investors.

If you are a retiree or someone who is getting close to retirement who sees the value of the portfolio and savings that you are counting on to fund your retirement years falling every day, you wonder what to do. There doesn’t appear to be any safe harbor in any of the standard, or even not-so-standard, investment options. With no viable options, most of us will just try to ride out this intensely painful period, avoid making decisions that lock in the impact of the current downturn, try not to constantly check the market indices, and hope that the needle on the pain scale starts to move in a more favorable direction.

When The Supply Chain Issues Hit The Office

Several years ago, our office went from the old-fashioned Bunn coffee maker that made entire pots of coffee to Flavia coffee machines that make one cup of joe. The Flavia machines use little packets of coffee, like those pictured above, that you insert into the machine to get your brew. My coffee of choice is the Pike Place roast. It’s a medium roast coffee that Starbuck’s describes as follows: “A smooth, well-rounded blend of Latin American coffees with subtly rich notes of cocoa and toasted nuts, it’s perfect for every day.”

And I do, in fact, drink it every day when I’m in the office. Multiple times every day, in fact.

Yesterday we ran out of the Pike Place, which caused me to experience a momentary flutter of disquiet. Later in the day, the guy who fills our coffee stopped by to refill the supply of our Flavia coffee packets. I was relieved to see him and told him I was sorry I had guzzled so much of the Pike Place. He shook his head sadly and explained that there was no Pike Place to replenish the supply on our floor. He noted that our firm was totally out of the Pike Place, and when he called the warehouse to see why our order of Pike Place wasn’t delivered, he was told that the local warehouse was totally out of it, too. He then put up a hand-lettered sign above the coffee machine to explain the situation in hopes that it would prevent Pike Place drinkers from rioting in the hallways.

We’ve all heard of the supply chain issues that the country is experiencing, post-pandemic. I had not heard of coffee being affected, but apparently I wasn’t paying attention, because there have been stories about the coffee supply being affected by the weather and shipping delays, and shipping snafus caused by congestion at ports have compounded the problem.

Of course, in the grand scheme of things a shortage in one particular coffee packet isn’t the end of the world; I can just shift to Cafe Verona or even (horrors!) decaf in a pinch. (There always seems to be a very ample supply of decaf, doesn’t there?) But the tale of Pike Place coffee packets in one office in one city shows just how precarious the supply chain can be.

The Great Crypto Crash

I frankly don’t get the whole cryptocurrency concept. I don’t understand how it works, or how it can have value. It seems like the most volatile, unpredictable possible investment. And the fact that it is the preferred form of ransomware payment required by computer hackers doesn’t exactly give it a veneer of legitimacy, security, or credibility, either.

In short, I’ve never invested in a cryptocurrency, and I can’t believe that will ever change. After this past week, I’m glad I’ve taken that conservative stance. To be sure, the stock market has been taking a beating recently–the S&P 500 is now down 18 percent since the end of December, and the Dow is down 13 percent over that same time period–but that is chump change compared to what has just happened in the crypto world. MarketWatch described last week as a “bloodbath” for cryptocurrency, with multiple different crypto currencies losing huge chunks of their market value. One crypto trading firm said last week represents “the largest wealth destruction event in the short history of the crypto markets.”

The abrupt valuation changes for some of the crypto firms is truly shocking. MarketWatch reports that one cryptocurrency, LUNA, was trading at about $80 in early May, only to fall “nearly to zero.” Another cryptocurrency that had been pegged at one to one with the U.S. dollar fell to as low as six cents. In all, it is estimated that the crypto market lost $400 billion in value over just seven days. Those are sudden and catastrophic losses on the same scale as the stock market crash in 1929. Imagine being one of the people who bought a cryptocurrency at $80, only to see their investment vanish within a week!

The crypto market has had some tough times before, but has rebounded. Will it bounce back this time–or will people begin to wonder whether getting into crypto is just too risky? One of the reasons the American stock market keeps its value, even during difficult economic times like the present, is that millions of American workers have a portion of their paychecks invested in the market through their employers’ 401k plans. That constant infusion of money is a nice little support mechanism that the crypto market just doesn’t have. When the big players decide that it’s time to get out of crypto–as they apparently did this past week–there is no safety net to absorb the shock.

Those Empty Theater Blues

As America works to recover from the various social, cultural, and economic impacts of the COVID pandemic, it’s becoming increasingly clear that one segment of the economy is facing a particularly difficult challenge: movie theaters.

The data on movie theater ticket sales tell a very sad tale for the industry. Ticket sales hit a high point in 2018, when 1,311,300,934 admission tickets were sold, producing revenues of $11,945,954,034. Sales dipped a bit in 2019, the last full pre-pandemic year, when 1,228,763,382 tickets were purchased–and then the bottom fell out. In 2020, when theaters were closed for most of the year in most of the country, only 221,762,724 tickets were sold, and I would guess most of those sales came in January and February, before shutdowns occurred in earnest in March. From that low point, sales rebounded slightly in 2021, to just under 500 million tickets, and if current trends continue, ticket sales in 2022 are on pace to hit just over 725 million–which is slightly better than half the industry’s best year.

In short, if you go to the local movie multiplex right now, you’re likely to find a lot of empty theaters, and you’ll get pretty good seats.

Interestingly, Gallup has periodically asked Americans about their movie attendance, and the recent data is dismal. In January of this year, Gallup announced that its polling data showed that Americans watched an average of 1.4 movies in a movie theater in the prior 12 months. The more compelling story, though, is told by individual movie attendance: 61 percent of respondents didn’t go to a theater at all during that 12-month period, 31 percent went out to watch between 1 and 4 movies, and 9 percent (figures are rounded for the math mafia out there) watched 5 or more movies. In 2007, by comparison, 39 percent of respondents attended between 1 and 4 movies in theaters, and 29 percent saw five or more movies. The Gallup data shows that movie attendance is particularly depressed among older Americans.

Gallup suggests that the movie theater business was grappling with challenges posed by competition from streaming services when the pandemic hit. With theaters then closed during the early days of the pandemic, and many people avoiding reopened theaters as new COVID variants emerged, the question now is whether people’s habits have changed to the point where going to a theater to watch a movie is even considered. And some of us would question whether the offerings being served up by Hollywood, where superhero movies and special effects rule the day, are going to entice broad groups of Americans to buy a ticket and a box of popcorn and settle into a theater seat to watch a film again.

Investing In A Nuclear Era

The war in Ukraine goes on, and since it began Russia has absorbed a series of embarrassing defeats and setbacks, including most recently the sinking of one the ships in its Black Sea fleet. The stout defense of Ukrainians is heartening for those who oppose evil aggression and the slaughter of innocent civilians, but it also has raised the possibility that Vladimir Putin might be tempted to do the heretofore unthinkable: launch some kind of nuclear weapon. Ukrainian President Volodymyr Zelensky warns that the world should be prepared for precisely that inconceivable scenario.

It’s a frightening time, for sure. And yet, things haven’t been as panicky as you might have thought. No one is hiding under the bed or encamped in their home fallout shelter. People live their lives and go to their schools and jobs, the economy bumps along, we worry about inflation and gas prices and shortages, and stocks continue to be traded. In fact, when you think about it, the stock market is pretty weird right now. Frightening times typically are bad for the stock market, which always reacts badly to uncertainty–and yet the market has held its own, even as concerns about the Russia-Ukraine conflict escalating to the nuclear level are raised. Why is that?

Paradoxically, it might simply be that the possibility of nuclear war is just too scary to really affect the markets. It’s too colossal a risk, and far outside the normal issues that affect trading in securities. If you’re worried about inflation, you can adjust your portfolio and trading patterns; if you’re concerned that equities are overvalued due to irrational exuberance, you can shift into fixed income investments. But there is no plausible investment strategy that can protect against the devastating impact of a nuclear exchange.

That’s why some analysts are encouraging their investors to stay bullish on stocks, even in the face of the risk of Putin launching nuclear weapons. One Canadian firm, BCA Research, recommends staying in the equities market for the next year, reasoning that financial risks are immaterial in the face of a potential existential risk. One article quotes BCA Research as saying, bluntly: “”If an ICBM [Intercontinental Ballistic Missile] is heading your way, the size and composition of your portfolio become irrelevant.”  

If you were searching for evidence that financial analysts are cold-blooded, look no farther! But, in a strange, counterintuitive way, this apocalyptic approach to investing makes sense in the current circumstances–and it may be why the market hasn’t plunged into Black Friday territory. The BCA Research approach might seem like the caterpillar approach from the fable of the ant and the caterpillar, but what else can an investor do? In such extraordinary times, the best approach may be to keep your head down, follow your investment strategy, and hope that Vladimir Putin keeps his finger off the button.

Getting Down To The Last KMart

The New York Post reports that the KMart store in Avenel, New Jersey is closing. By itself, the closure of a discount store wouldn’t be news, of course–unless the closing of the store means that the countdown to the very last KMart in America is getting close to completion. With the closure of the Avenel store, there are only three KMarts left. Given the fact that KMarts have been closing regularly–here’s a report of the last Buffalo KMart closing, for example–we’ll soon be down to the last KMart, just as we are down to the last Blockbuster.

In a way, it’s hard to imagine that there are only three KMarts left, but in a way it’s hard to imagine that any KMarts are still around. It’s hard to imagine there are only three left because KMarts were once ubiquitous in America, with more than 2,000 stores that were found just about everywhere. KMart was a dominant low-cost retailer, and the KMart “blue light special”–a flashing blue light that alerted shoppers to especially cut-rate deals, along with an accompanying announcement that began “attention, KMart shoppers”–was the stuff of retail legend and the butt of countless jokes. Everybody laughed at those jokes, because everyone had been in a KMart. It was a kind of shared national experience, like the three television networks or McDonald’s french fries. Back in the ’70s and ’80s, no one could have predicted that KMart wouldn’t continue to be a blue light leader forever.

But viewed from today’s perspective, it’s hard to think that KMarts still exist. The store’s business model seems like a relic of a bygone era. It’s not that Americans aren’t still bargain hunters, of course, but now no one wants to think that they are buying something cheap, and the whole KMart linoleum-tiled experience screamed “cheap.” Now Americans do their bargain-hunting online, and not in the glare of a blue-light special.

The demise of KMart shows, once again, that the American economy is a constantly changing, ever-challenging interaction of consumer preferences, cultural trends, socio-economic movements, fads, and countless other factors all combined into one complex, roiling mass. If you lose the golden thread–as happened with KMart, and with Blockbuster and other forgotten retailers before it–the fall to failure and oblivion can be swift.

End Of The Malls

Columbus’ local ABC affiliate is reporting that the city has filed nuisance abatement actions against the owners of the old Eastland Mall. The article linked above reports that, in the court action, the city has presented photographs that reflect a property in decline, with accumulated trash, broken windows, crumbling canopies, dilapidated walls, and a sinkhole underneath the parking lot. According to the article, Columbus code enforcement also offered photographs showing people living in tents on the mall sidewalks.

The sad tale of the Eastland Mall is another sign of the end of suburban American mall culture. Indoor malls were a phenomenon that swept the country in the ’60s and ’70s, putting many downtown stores out of business and shifting retail activity to the ‘burbs. Featuring “anchor stores,” countless smaller stores, food courts, and acres of parking spaces, indoor malls were generic places where people could shop, retirees could walk to the accompaniment of mall music, and kids who became known as “mall rats” could hang out with their friends.

No one who grew up in the ’60s and ’70s would have dreamed that their clean, antiseptic mall could turn into a crumbling eyesore, but the handwriting has been on the wall for years now. In Columbus, the travails of the downtown Columbus City Center mall was the canary in the coal mine that showed the indoor mall era was ending. City Center opened with great fanfare in 1989, struggled, and closed two decades later; it was then torn down and became the Columbus Commons greenspace and the location for mixed use developments. Other Columbus malls, like the once-thriving Northland Mall, also have been torn down, and the retail trends have shifted to open air shopping venues, like the colossal Easton Town Center development.

The American economy is vibrant, but ever-changing. The rise and fall of the indoor mall culture is a good sign of that reality.