Payson Roundup

The upside of what might be the longest recession since the Great Depression is the historically low interest rates, experts said at the Guerrilla Tactics —Business Financial forum Tuesday at Gila Community College.

“It’s a good time to apply,” said Derek Shreiner from National Bank of Arizona.

“A lot of people are borrowing cash to get them through the next 12 months,” said Bradford Wright, a commercial banker with National Bank of Arizona, during an intermission. “People need cash right now.”

The low interest rates coupled with good deals on houses make it a good time to buy, said Realtor Paul Bates with ERA Young Realty and Investment. His last two customers paid cash for homes in the $200,000 range.

Bates also said he recently closed a house with no money down. “It shocked me to no end,” he said, adding that the lower-end price made the deal possible. No money down on a $400,000 house would spiral the payments out of control, Bates explained.

Wright, who bought a house two months ago, said that the United States Department of Agriculture’s rural develop-ment program is working with potential borrowers for home loans.

Although the evening was geared toward teaching business owners how to survive this sour situation, many of the principles applied to personal finance as well.

For instance, bankers urged people to talk with their lenders early if they experience financial trouble.

Representatives from Arizona State Credit Union said they not only offer free accounts, but their personal checking accounts pay members dividends on daily balances over $1,000.

“I think we’re the best-kept secret in town,” said branch manager Julia Thompson. The credit union is a nonprofit, owned by members.

“It’s a huge difference from what you might find in the corporate credit world,” she said. “Credit unions really are designed for our membership.”

The current recession has already lasted 13 months, which is the longest since the 16-month downturn in the early ’80s, according to a handout provided by Compass Bank City President Mike Whalen.

Another 16-month downturn occurred from November 1973 to March 1975.

Home prices in Phoenix are now the same as in June 2004, according to the Case-Shiller Home Price Index, also provided by Whalen.

Home prices have fallen 40 percent from the June 2006 peak. However, the decline has slowed to 16 percent in the last six months.

“It’s really been a discouraging period of time,” Whalen said.

“What you don’t want to do is wait to talk to your bank,” he added.

Ron Nielsen, director of the Small Business Development Center, agreed. “That means you might have to swallow your pride,” he said, but banks are federally required to report payments that are 90 days late.

“In the tough times, you have to take extraordinary steps to stay successful,” Nielsen said. Success will likely require diversifying business and looking at “non-traditional” ways of making money.

Someone who sells trees for new construction landscaping, for instance, might enter the business of landscape maintenance.

In this economy, the mode is survival and the method is creativity, presenters said.

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