We ALWAYS notice when something gets more expensive, but do we notice it when prices fall? We should, because the prices probably won’t be falling forever, so you need to take advantage of falling prices when you can. Sometimes recessions aren’t such a bad thing, because we often tighten up our finances which lowers demand and causes prices to fall in a lot of industries. Also, our wonderful friend called technology is also causing a lot of industries to make things more efficiently and drop prices. Remember when it was minimum $1,500 to buy a flat panel TV? Now you can get a 32″ for about $400! This isn’t an exhaustive list, but here’s some major things that are getting cheaper and helping many of you out according to the bureau of labor statistics data on consumer price index.
1. Real Estate – I don’t know how much longer this is going to last, but real estate in a lot of markets has been on sale for a while now, and it seems like it’s still gradually dropping or staying low. There are still a lot of distressed sellers out there, which means prices will continue to drop as people dump homes that they could never afford. Plus, 30 year mortgage interest rates are around 4.75%, which is ridiculously low and I don’t know our generation will ever see interest rates that low again. Needless to say, it’s a great time to buy real estate, but only if you’re in the right financial position to buy. Don’t go out and buy a house just because it’s a good deal right now. Pay off debt first and build up a good down payment before jumping into a huge investment like a house.
2. Cars – The average cost of a new car is about 3 percent lower than in 2000, despite better safety equipment and more advanced electronics. Used vehicles are down even more, by about 8 percent. However, aggressive fuel economy rules set forth by the wonderful federal government will probably raise the cost of cars over the next few year, so if you’re looking to upgrade, now is the time to do it.
3. Clothing – The average cost of clothing has gone down about 8% since 2000, and good news for parents as kids clothing has plummeted by about 27% since 2000! That’s insane. Unfortunately, cheaper overseas factories are a big reason for the reduction in price and probably less quality.
4. Your Kitchen – Food costs have slowly risen, but the cost for major appliances has stayed about the same and the cost of smaller appliances has dropped about 25% since 2000.
5. Home Entertainment – The cost of TV’s has plunged 84 percent along with audio equipment and DVD players dropping considerably as well. The best time to buy a TV is still during the winter holidays. It’s usually when stores are trying to get rid of old models for new ones to come in.
6. Your Home Office – Obviously, we all know that the cost of computers has gone down considerably, and this is largely due to the exponential advancements in computer chip technology in the past 10 years. Computers have gone down about 80% since 2000, and even the cost of Internet relative to the speeds you now enjoy has gone down considerably.
7. Photography – We have gone crazy for cameras in the United States, and the crazy demand has created crazy supply and rapidly advancing technology, so prices have dropped about 60% since 2000. Pictures are still the best way to capture a memory or a great moment, in my opinion, and now is the best time to buy a good camera.
As far as consumer electronics go, we will continue to see the trend of them getting cheaper, but housing and car savings may not be around for too much longer. Thank you to Innovation and Technology for making our stuff so much cheaper!