The “Financial Storm of the Century” of the Week

If you managed to gain consciousness today, you probably got the news about this once-in-a-century economic fallout that the Lehman and Merrill Lynch buyouts have signaled. While I, too, started shaking in my boots a little, I’m hoping the lack of liquidity doesn’t trickle as far down as the pundits are saying. Now that the economy is hurting far beyond mere real estate, let’s consider where North Shore home values will go (what we thought was) the nadir of the bubble-pop. You might be asking the question: are home values going to go lower than they already are?


The answer: of course. But the North shore won’t see nearly as much pain as the rest of Illinois. One of the biggest fears of this most recent dropout is the lack of liquidity in major financial institutions–retail banks are down the tubes, and people are worried whether they’re own money will be secured by the FDIC (of course it is– they’ll just print more paper!). Right now it’s tough to get a loan; however, if you’re in the top tier of borrowers and ready to put 20 percent down, you could buy yourself a deal that will level out–in a few years. With North Shore median home values comfortably above $500k, you might be better off putting that savings toward a hefty down payment, rather than in a low-interest savings or money market. Wilmette, for example, is only just beginning to see a drop in home prices, starting from the fourth quarter of 2007. Keep track of the dip; if you’ve got the savings and are ready for the long haul, you will find yourself in a solid position for growth.

As for the financial storm of the century: I’m not putting my money in the Bank of Mattress…yet.

921 PINE St

Price: $1,495,000
Beds: 5 On Redfin: 147 days
Baths: 3.1 Year Built: 1920


Price: $899,000
Beds: 4 On Redfin: 133 days
Baths: 2.1 Year Built: 1927


Price: $819,000
Beds: 3 On Redfin: 119 days
Baths: 2.2 Year Built: 1921

  • Alex Loddengaard

    Somewhat unrelated: I think a lot of people get caught up in the product and what its vision is, without taking a step back and looking at the user experience, what it’s lacking, and how it can be better than its competitors’. So in addition to spending too much time on numbers, people ought to also avoid that OCD impulse to build out a product for the sake of the product.

    • GlennKelman

      That’s worthy of a separate post Alex!

  • Barbara Bailey

    In number-crushing, you can miss your best lemonade stand.

  • Clare

    Ahhh, an accountant with heart and soul. The key question is what do these numbers mean to peoples’ lives and how are they different because the numbers are this way or that?

  • Pat Moore

    Hi Glenn,

    Another example of the lemonade-stander approach:

    I remember one company meeting at Plumtree, where John reported the results of a little test he ran on the sales force. He asked each sales person to cold-call a voice mailbox. As John relayed at the meeting, the results were “disappointing”. If I recall the VP of Sales left shortly thereafter.

    In football, after a disappointing season, the (usually replacement) coach talks about “the blocking and tackling” basics, “the fundamentals”, etc.

    Too many web companies get all wrapped up in the complexity and they ignore the fundamentals of any business: cash flow, customer satisfaction, repeat business, and being able to ….. sell.