No more $5 pizzas ... a (sort of) housing market lesson

The $5 pizza restaurant in my neighborhood closed down yesterday, much to the dismay of my 13-year-old son.

That’s right, for just $5 you could get a large pepperoni, sausage or cheese pizza. It wouldn’t taste that great, but two pizzas for $10 could feed our family on lazy nights when no one felt like cooking. You know, like Fridays.

Anyway, that place closed earlier this week. I was surprised because it always seemed fairly busy. But this is a tough economy, and more than a few businesses that I thought were successful are long gone from our community.

The pizza place, though, reminds me a bit of today’s housing market. Really. A few months back, the owners tried to bump the price of those large cheese, sausage and pepperoni pizzas to $7.99. We stopped going there. So did a lot of other people, I suspect, because soon enough the price fell back down to $5. Cheap pizza, it turns out, isn’t like gas or cigarettes. People won’t buy it at any price you randomly throw on them.

I remember telling my wife that the pizzas weren’t bad for $5, but they weren’t good at all for $7.99.

That’s how it is for housing today. You might want to price your lovely bungalow or Victorian or Cape Cod at $300,000. But if people won’t buy it for more than $220,000, you really have little choice. You either drop the price down to what people are willing to pay or you go out of business — metaphorically, at least.

As far as our pizza Fridays? I went to the supermarket located right across a parking lot from the former pizza place and bought two frozen pizzas for just over $10. And, yes, when I got back to my car I did feel a little glum looking at the empty pizza place. Pizza restaurants should never close.

 

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  • Just because someone told you during the boom that your place was worth X, doesn't mean it was, or is anymore.

    The person who could afford those prices, didn't want to live in [insert neighborhood]. And the person who wanted to live in [insert neighborhood] couldn't afford those prices.

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