In early 2008, David Roberts’s morning routine at the Ridgewood, New Jersey, train station was as unchanged as the view from its platform, which overlooks a downtown anchored by the Daily Treat diner and a 77-year-old movie theater. Roberts would sip coffee, eat a corn muffin, scan the Financial Times and step aboard the 7:50 train.
This was not the same trip he had made for the 14 years he worked for three Wall Street firms. This was a commute to nowhere.
Roberts, 61, was bound for an outplacement center on New York’s East 37th Street, where he pursued job leads and the dream of starting a consulting firm with former colleagues. Like many of his neighbors in Ridgewood, Roberts had been thrown out of work after the credit markets seized up last year, joining thousands of commuters in the competition for jobs that don’t exist anymore.
Roberts, an economist at Dominion Bond Rating Service until January 2008, was fired 13 months after he predicted in a published report the recession that would end his livelihood.
“You can see a train wreck coming,” Roberts says. “But that doesn’t mean you can get out of the way.”
Roberts has suffered through a chain of unanswered job applications, an ill-fated relocation to Washington, and depression. As of April, he had lost or spent more than half of his $1.4 million in savings. One of the few risks he takes with money these days is at the poker table.
Roberts and his wife — who is battling multiple sclerosis — are moving to Vermont, where they honeymooned and often vacation. He has grown a gray-and-white beard more befitting the Green Mountains than Wall Street.
Knowing that the money he has left won’t last forever, Roberts must figure out a new way to earn a living. “I don’t know where the income is going to come from,” he says.
Roberts is one of 26,000 people who lost financial services jobs in New York City from January 2008 to March 2009, according to Moody’s Economy.com. Many live in bedroom communities such as Ridgewood — a Bergen County enclave of 24,300 people 25 miles from Wall Street.
Ridgewood retailers say some stores’ Christmas receipts were off 40 percent last year. As many as 30 stores and restaurants in the business district are for sale. The village government trimmed three building inspectors after a two-year, 46 percent drop in construction activity.
Nestled in the foothills of the Ramapo Mountains, Ridgewood has had a symbiotic relationship with New York’s financial district since the mid-1800s, when tycoons built summer homes there. Commuter trains soon carried dad to the financial jungle while mom stayed home and raised the kids. “It’s for domesticated masters of the universe, a throwback to the 1950s,” says Erik Sorenson, chief executive officer of online career firm Vault.com and a Ridgewood resident.
Ridgewood’s projected median household income for 2009 is $129,394, according to market research firm Nielsen Claritas, which makes it the 17th-most-affluent U.S. community in the 20,000 to 50,000 population range. From 1991 to 2006, the average home sale price more than tripled to $864,000, according to the New Jersey Multiple Listing Service.
Now that market has reversed. Ridgewood averaged 11.3 home sales a month in the first quarter of 2009, versus 32 in the first quarter of 2007, a 65 percent drop, according to Otteau Valuation Group Inc., a real estate analysis and consulting firm in East Brunswick, NJ.
Roberts says he and his neighbors who worked on Wall Street “do not understand: You lose your bonus, you lose your job, and you have no prospects.”
“We have no income coming in,” he says. “I’m just trying to get by. I don’t know what the end scenario is going to be.”
The Robertses have found getting out of Ridgewood is easier said than done. They put their house on the market for $899,000 in October and had to lower the price three times before getting a contract — for $760,000. That fell through in March. As of mid-April, they had a new contract for $775,000.
They’ve lined up a rental house in South Newfane, Vermont, for $1,800 a month, roughly half their current mortgage payment. Next, Roberts must figure out how to stop the money drain, which has reduced his nest egg by half to $720,000. More than 70 percent of the money disappeared in the market crash, he says, lamenting that he didn’t act on his own prediction that a recession was coming.
“As an economist, I have no excuse whatsoever,” he says.