On The Money: Beach business climate always seems sunny

Even when I’m on vacation I am always checking out the business climate where I’m supposed to be relaxing. It’s just a habit I guess. On a recent trip to Santa Cruz, I was curious how this laid-back beach region was doing amid this stifling recession.

I was surprised to see that housing prices from Santa Cruz to Monterey really hadn’t come down much. While there do seem to be some short-sales and bank-owned properties on the market, if you’re not willing to drop $700,000 to live in one of the beach communities, not necessarily on the beach, or $500,000 in some of the farther-out enclaves up in the redwoods, you’re out of luck.

And the number of properties with asking prices of $1 million and up is pretty shocking. I don’t know how many of them are selling, but it’s certainly a different world than here in the valley. On any weekend, there are tons of open houses but not a lot of foot traffic from what I could see.

Obviously, coastal property holds its value pretty well, or at least folks aren’t willing to sell it for less and don’t have to. Who can blame them? So if you’re looking to jump into a nice vacation home on the beach at bargain prices, with jumbo loan, good luck.

On the flip side, there seemed to be a lot more retail space for rent. The summer is the peak season for most retail and service businesses in beach country, but there seems to be a shortage of tenants in some of the most desirable locations – near the water.

It’s likely that many of those shops are hobby businesses that don’t make much sense to operate when the numbers get ugly. In this economy, that’s much more likely than when everyone is riding the crest of the economic wave. How many beach town gift shops can a few tourists with less money support? Not many.

Still, there are more of those shops than seems reasonable given the recession. But economic pain is never equally distributed. Those who have lots of money still have more than the rest of us in down times. That’s usually when they make it. Anyone want to go in as partners to open a Hawaiian shirt shop in Capitola? WIPEOUT…