2012 - Predicted Price Hikes & Price Cuts

GRAND RAPIDS — After recent months of what seems like non-stop holiday sales, followed by after-Christmas clearance deals, consumers may soon feel sticker shock when they go shopping in the post-sale world.

Prices are expected to increase in 2012 on everything from travel to electronics to health care.

For example, Chinese factory workers will see a wage increase this year, which is expected to raise the cost of everything from cheap electronic accessories to high-end electronics.

“It will add to the overhead and increase prices across the board for many things,” said Lindsay Sakraida, director of features at dealnews.com.

Sakraida says her team talked to analysts and sifted through data across several industries to “read the tea leaves” of where the price hikes will be in the next 12 months. We supplemented those results, and cross-checked them with local businesses for their take and advice.

1. Domestic and International Airfare

What: Domestic flights will increase as much as 5 percent for economy seating, depending on the length of the flight, and as much as 7 percent in business class, according to an American Express survey. The hike is expected to be bigger for international flights, especially European travel with a new green tax that will levy a fee of about $15 per passenger.

Why: Greater demand and fewer available airline seats are expected to add up to higher ticket prices for the next year. Those price hikes may not be felt as much at Gerald R. Ford International Airport, where prices fell with the arrival of low-cost carriers AirTran, Allegiant and Frontier, said Bruce Schedlbauer, spokesmen for the airport.

Tip: Buy in January before prices go up, or be flexible with your travel plans to take advantage of when airlines try to fill up remaining seats. Some of these deals are offered at the last minute. A travel agency can also help consumers find the best deals and beware of “hidden costs” before buying tickets, said Peggy Reynolds, at Dolphin Vacations in Grand Rapids.

2. New Digital Camera Models

What: The price range for newly-released digital cameras are expected to go up.

Why: Smartphones have quickly replaced budget friendly point-and-shoot cameras, so manufacturers and retailers are focusing more on higher-end digital cameras. Still, SLR camera prices have dropped as much as 50 percent, notes Ted Lausman, manager of Marks Photo & Video on Division Avenue in Grand Rapids.

Tip: Typically, manufacturers begin offering deep discounts on last year’s products leading up to the introduction of new cameras in the spring and fall.

3. Hard Drives

What: Hard drives might cost 30 to 40 percent more than last year.

Why: Epic flooding in Thailand has disrupted production there, resulting in some retailers rationing hard drive-based products. Dealnews.com predicts continued shortages through the first quarter of 2012, which is when experts predict production will begin to catch up to demand.

Tip: For those who can’t wait until prices come back down, big box retailers such as Best Buy and Staples have a bigger supply because they buy in bulk, said Keith Cramer, with PC Outlet, a computer repair store in Grandville. Some consumers are turning to solid state drives, a new kind of data storage system often used with Apple products, which have come down in price, Sakraida said.

4. Desktop Computers

What: Prices on new desktop computer models are expected to increase about 30 percent.

Why: The consolidation of desktop features into monitor-integrated units — many with touchscreens — will drive up prices. Local experts don’t expect the price hike to be drastic but acknowledge that, with the growth of the laptop and tablet markets, there will be fewer companies manufacturing desktop computers. Overall, desktop computers prices have fallen dramatically in recent years from $2,000 to $3,000 to the $500 to $600 range, said Bryan Tilburt, project administrator with Tech Enterprises Inc., which has a location in Grand Rapids.

Tip: Assess whether you really need to upgrade your computer, and whether it should be a desktop or a laptop, said Tilburt.

5. Food For Home Preparation

What: Food prices are expected to go up at least 2 percent in 2012.

Why: Food costs rose 6 percent last year. Rising prices are likely to affect food eaten at home, rather than restaurants where those costs are easier to absorb when combined with sales of liquor, reports dealnews.com.

Tips: Apply high value manufacturer coupons to the absolute best local sales. “The lowest overall shopping bill comes from hitting several local stores and picking up only the best deals at each of them.” said Josh Elledge, founder of Savings Angel.

6. Mobile Device Data Plans

What: Data plans are expected to become more expensive as companies move away from unlimited data plans to tiered plans.

Why: Carriers want to recoup costs of building out their 4G services by increasing revenues, according to dealnews.com. “A lot of carriers are overwhelmed with the demand of data,” said Sakraida.

Tips: If you are shopping for a plan, take stock of how much data you use. “If you are on an unlimited plan, it’s best not to mess around,” said Sakraida. “You might get grandfathered in, if they change the plan.”

7. City-Enforced Fees

What: City-enforced fees for everything from dog licenses to vehicle registration and parking rates are going up, as is enforcement of fine-related infractions.

Why: Municipalities look for ways to make up for budget shortfalls. Grand Rapids has hired consultant to review fees which could be raised as part of the budget process. But state law prevents the local governments from charging more than the costs of providing services, said Deputy City Manager Ted DeLong.

Tip: Not much you can do except avoid getting tickets or fines.

8. Water

What: Most communities in the United States will face water rate hikes this year, even places that are rich with the natural resource.

Why: Holland Board of Public Works, for example, plans to raise water rates by 10-13 percent, and wastewater by 8-10 percent to help pay for more than $38 million in planned infrastructure improvements. Generally, these kind of increases are also tied to the need to generate more revenue.

Tip: Conserve water by taking shorter showers or watering your lawn less.

9. Gas **

What: 2012 is expected to be another budget-breaking year at the pump, with prices once again topping $4 per gallon.

Why: Lots of reasons, from instability in the Middle East to the drying up of gas subsidies in Nigeria and ethanol in the U.S. Then the year started high with record increases in 2011. “If there is a supply disruption in terms of oil or gasoline, we’ll see new records,” predicts Patrick DeHaan, analyst with GasBuddy.com

Tip: DeHaan suggests filling up on Monday or Tuesday when prices tend to be lower . GasBuddy.com sends out alerts a few hours before prices go up.

10. Gold **

What: Engagement rings, wedding bands and other gold jewelry will cost more.

Why: The precious metal is poised to achieve its 11th straight year of growth, with prices expected to increase by 12 percent in 2012. Continuing political instability and economic turmoil are some of the big reasons.

Tip: Sell that old gold jewelry to buy something new, said Bruce Talsma, of Talsma Jewelers in Grandville. Another option is choosing non-gold wedding ring made of titanium or sterling silver.

11. Shipping **

What: Shipping is going to cost more, and free shipping offered by retailers could start to decline.

Why: U.S. Postal Service is raising rates by an average of 4.6 % this year, while both FedEx and UPS are hiking small package rates by 4.9 %.

Tip: Look for retailers that will help pick up part of all of the shipping cost.

_{12. Health Care **}

What: Health care premiums are going 20-45 percent.

Why: More people using health care and medical costs going up. Although costs are rising at a slower pace than last year, they will continue to rise. Companies are changing plans or shifting more of the cost to employees through higher deductibles and co-payments, said Lody Zwarensteyn, president of the Alliance for Health.

Tips: Take advantage of incentives that reward healthy behavior, and shop around for medical offices and pharmacies that charge less.

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12 items we predict will cost less in the coming year. From TVs to laptops, cash-strapped shoppers should keep an eye on prices for these items; even wine might see notable discounts next year!

1. Apple iPad 2
The iPad 3 will not feature a significant price drop (if any at all), but one thing is guaranteed — Cupertino's forthcoming tablet will most certainly bring down the price of refurbished iPad 2s. (As the iPad 2 did for its predecessor.) The iPad 3 may even cause resellers to offer more deals on new iPad 2 models as they try to move yesterday's tech to make room for Apple's latest and greatest.

2. Wine
prolonged period of time with stable or declining wine prices. With less disposable income, folks have left wines priced at $30 and above untouched on store shelves. So to move stock, retailers are expected to offer more sales and even flash deals on wines.

3. Desktop Replacement Laptops
Intel's Sandy Bridge CPUs may be dominating the laptop landscape, but it's AMD's recession-friendly Fusion APUs that are driving prices down, particularly in the realm of desktop replacements. The star of the show is AMD's A Series APU, which promises better battery life, better video playback, and more affordable prices among desktop replacements. Just last week we saw systems plummet to $350, an unprecedented price low for any desktop replacement.

4. Android Tablets **
The Kindle Fire has been Amazon's most successful product ever launched. The release of this groundbreaking tablet has, a-hem, ignited a fire among tablet manufacturers as they scramble to match Amazon's $199 price tag. For consumers, the competition translates to better tablet bargains in 2012.

5. Solid State Drives (SSDs)
Solid state drives, however, were not affected by the flooding and while their cost per gigabyte is still higher than that of a traditional hard drive, their demand is now greater. In addition, dealnews data shows that SSD prices are steadily dropping; in 2011 the price of a 64GB SSD drive dropped 33% while the price of a 128GB drive dropped 21% — a trend that we expect will continue in 2012 as more SSDs permeate the market in place of 2.5" hard drives.

6. Car Rentals
Gas and airfare may be going up in 2012, but car rental rates are expected to remain flat, as agencies across the country reportedly have excess cars available. More stock and subsequent competition is thus expected to keep rental rates low throughout the new year, and we anticipate to see an increase in the number of discounts on car and SUV rentals.

7. eBook Readers **
Each new generation of Amazon's Kindle reader has chipped away at the eBook reader's price tag, sometimes by as much as 61%. Assuming there's a new Kindle in 2012 (rumor has it that an e-Ink update with video support will debut), we expect to see continued price cuts on Amazon's popular eBook reader, sending previous Kindle models into all-time low price territory.

8. Apple MacBook Air Refurbs
in 2012, and the new model (which would be the 6th generation) is guaranteed to drive refurb prices down even lower. Don't care for a refurb unit? In 2011 we also saw aggressive deals on new, current 5th generation MacBook Airs with prices dropping from $999 to $850 (14%).

9. Standalone GPS Units with Lifetime Maps **
The smarter our phones get, the greater the number of gadgets they're capable of replacing. And no gadget is as close to extinction as the GPS unit. So it comes as no surprise to see manufacturers slash prices on standalone GPS units with lifetime / live maps. dealnews data shows that in 2011, units that were once fetching around $160 reached price-lows of just $70.

10. Media Streamers
Roku, but when Blu-ray players with built-in streaming start to cost less than the price of a Roku box, it's time for the latter to get aggressive. In order to remain relevant in 2012, media streamers (such as the Roku player and Boxee Box) must out-price Blu-ray players. We anticipate seeing more deals and lower prices on these electronics.

11. 3D HDTVs
3D HDTVs are a tough sell. Not only are they pricier than traditional CCFL-based LCDs and standalone LED-based sets, but they also require a bigger investment as you'll have to purchase 3D glasses, a 3D Blu-ray player, and 3D Blu-ray discs to get the most from your 3D TV. In 2011, we saw prices for 55" 3D televisions drop 33% from $1,499 in January to $999 in December. The new year will bring an influx of new 3D TVs, which means vendors will try to combat lagging sales with discounts on 2011 3D HDTV models.

12. Home Prices
Despite record-low mortgage interest rates, United States home prices are expected to limp their way into the coming year. In 2011, average home prices across the country were down 3.4% (compared to the same period of August to October, 2010). And with unemployment expected to remain high, 2012 is looking like it will remain a buyer's market.

Kodak is predicted to close by the end of the year, so buyer be warned.

TomTom is ending their GPS manufacturing, so buyer be warned.