Recession Still Dogs Niles, But One Bright Spot Appears
The foreclosure rate reaches a shocking 32.4 percent here, but some businesses are opening.
While an economic think tank declared the U.S. recession ended in June 2009, that happy recovery hasn't hit Niles yet.
The National Bureau of Economic Research, a Massachusetts-based nonprofit organization which asks economists to crunch data, declared the recession ended and a modest economic expansion began 16 months ago.
In Niles, however, people wonder what those economists were thinking. Business people and residents report business is down, foreclosures are up and jobs are scarce. Village statistics yield one glimmer of hope--the rate of businesses closing has fallen dramatically.
Bill Livaditis, owner of the Sheepskin Depot shop, wasn't seeing that hope on Wednesday.
"Things are tight," he said. "In two days, I've had two customers, and one had a return. Normally at this time of year we do at least 40 percent more business."
People aren't spending because they don't have work, he maintained. Some longtime customers at his shop have even asked him where they can find jobs.
Slipping from affluent to anxious
Andrea Perry certainly could use one. The former graphic artist has been out of work so long that her 99 allotted weeks of unemployment benefits ran out.
She and her husband Patrick used to make a combined income of $100,000, but after a series of layoffs, they don't know how they're going to pay the $500 electric bill due this week. They're afraid ComEd may shut off the electricity.
"Our savings are gone, our pensions, our 401Ks. We're down to the meat and bones now," Perry said, explaining her husband lost a series of jobs when the employers kept going out of business. Patrick Perry, a former desktop operator for a print shop, was unemployed for two years, but recently found a lower-paying job in quality assurance.
"For two years, we didn't have health insurance. He's diabetic, and the prescriptions cost $400 a month," Andrea Perry said. "Our savings went for the mortgage and medications."
The couple rents spots at the Oakton Antique Mall in Elk Grove Village to sell their collections of Barbies, coins and music boxes, but barely break even some months.
"We have nothing left except the contents of the house, and the house went down $100,000 in value," she said.
Home values keep falling
Those drastic drops in home values are real. Dave Olzeski, an agent with Century 21 Elm in Park Ridge, took this week's numbers from Midwest Real Estate Data, a multiple listing service, and found that that the average Niles single family home sold for $291,158 one year ago, and $245,000 this month--a decrease of 16 percent.
Condos and townhouses fared even worse. In October '09 they sold for an average of $191,863; this month they averaged $145,000, a decrease of 20 percent.
Olzeski also looked at the number of distressed properties, which include foreclosures and short sales. Out of 148 single family homes sold in Niles in the past 12 months, 48 of them--a whopping 32.4 percent--were distressed properties.
"That's huge," he said. "One of out of three."
It was a similar story for condos and townhouses. Of the 104 sold in the past 12 months, 31, or 29.8 percent, were distressed.
"When one-third of the community is distressed, if you're selling your home, you're competing with one out of three distressed properties. It's going to impact you," Olzeski said.
"Is the recession over? Maybe in some sectors, but in housing, there's no end in sight."
Fewer businesses are shutting down
Housing may be tanking, but Denise McCreery, the village of Niles' business coordinator, checked her figures and found something slightly encouraging: in September, 13 new businesses opened, though six businesses closed.
"This is actually a good sign for us because a few months ago these lists were disproportionate, with more businesses closing," McCreery said. She speculated the number of new businesses may be higher because people who can't find jobs are opening their own shops.
Examining the numbers further, McCreery said that from the second quarter of the year to the third quarter, the number of store closings went down by 50 percent. The number of store openings went down, by 7 percent, but McCreery was encouraged that the rate of store closings slowed by half.
Still, as McCreery visits businesses throughout town to focus on retaining them in Niles, she has heard many stories of belt-tightening.
"I'm hearing from business owners that they've had to consolidate households, with children or parents or siblings, or having the grandparents move in," she said.
Even businesses that seem to be recession-proof have seen business fall off.
One might think funeral monuments would always be a necessity, but Anna Ricciotti, manager at Patek and Sons Monument Co. in Niles, across from St. Adalbert's Cemetery, said, "Our business is kind of recession-proof but the recession does affect us because people don't have to do it right away. They can hold off," she said.
People are also buying smaller lawn-level monuments, which lie on the ground, rather than standing monuments.
"We have had many families who have been through layoffs, and people have been spending less than in the past," she said.
McCreery said her biggest concern, which she reported to Niles Mayor Robert Callero, is that there are no new jobs. Businesses she visits tell her they're concerned about the employees they've laid off, but also concerned that the remaining employees can't meet the workload and that quality may drop off.
"The most I can gather is that everything is unpredictable at this time," she said. "We just don't know what's going to happen."