N. California College of Construction News Blog

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October 20, 2012

Posted by nahetsblog on October 19, 2012

‘ HOUSING SURGE LOOKS SOLID
CONSTRUCTION GAIN MAY BUOY U.S. ECONOMY"

A recovery in home construction is finally building enough strength to help the economy instead of dragging it down.It is about time,the home construction business showed huge numbers in September,August housing starts were up 11.2 percent over July and the Commerce Department came out with a report last Thursday that showed September with 15 percent over August, that is for all four regions,even though the northeast was the worst, the other three made up for it.The National Association of Home Builders ,NAHB. said that the last quarter has showed slow but steady growth and now they are showing fast and steady growth,

Housing typically leads us out of the recession,and the only reason it did lead us out of this one is this recession has been the only one that was caused by housing,the housing bubble that burst in the last half of 2008 is what caused what most economist refer to as the biggest recession since the great depression,some areas of the country saw 40 to 50 percent of homeowners equity go poof in thirty days,that hurts,best estimates now are less than 20 percent of current homeowners are underwater with their bank,that is half of what it was five months ago.

Home construction is closely watched because it is labor intensive and most economists feel that for every two houses that are built creates one fulltime job.That cannot be proven or disprovened absolute perfect for most economist,that just the way they like it,heck,most of them cannot even me a Monday morning quarterback,their batting averages on their predictions is akin to the third basemen for my Yankees,he gets 29 large and he batted a buck twenty in the playoffs,and here is a real kick in the pants,in the clutch they sat him down for a forty year old part timer. Imagine that,37 years old and they bench you for a guy who is forty but he still gets his 29 million dollars every year for the next four years.

Last year was the worst year for new housing starts since they started keeping tract,434,000 new homes were built in 2011,so far this year we are on pace to pass that number by at least 21 percent.NAHB predicts increase of 21 to 25 percent increase over the next 6 months.

HOME PRICES BUILD TO NEW PEAKS IN DOZENS OF U.S. MARKETS

U.S. home prices are starting to inch up, after getting the bejeeza beat out of the prices over the last five years finally they are going up,not all over the country but in a lot of places where they have been stagnant for years.More than a 100 metropolitan areas our over their all time high and 50 areas are currently within 2 percent of their all time high.That,s nice,some examples of the ones that are higher than they have ever been Austin,TX,Denver and Boulder CO,Indianapolis IN,and Portland MN. Many of the cities that are close to their peak now never had the huge swings in the prices in the first place,so they did not have far to go to get to their peak.Other markets that are close have been driven by their local economies,energy and agriculture did not suffer as bad as other areas.

Nationally the July price was 1.2 percent above one year ago,August was 4.4 percent above one year ago and September is expected to exceed August,so with the auto sales having a fantastic quarter for United States and Canada most of the economic indicators are pointing up,finally.

CONSUMER SPENDING UP AGAIN,RETAIL SALES RISE BY 1 PERCENT

Americans spent more money at the retailers in September, that surge is a reflection of their confidence,the 1.1 percent advance is followed by a revised 1.2 percent for August,those two month,s are the biggest uptick we have seen sinceOctober 10.

A huge drop in joblessness and a firming up on the price of homes and we are starting to see the consumer confidence index go up,many Americans are reducing their debt loads in lieu of spending,builders are extremely concerned with their debt load and businesses are cautious about hiring and raises,so who is going to blink first,the consumers are waiting for the businesses to start hiring and expanding along with upping the ante on the pay scale and the businesses are waiting for the consumer to start spending their money like a drunken sailor on a Saturday night shore leave.

For most of us our home is our most valuable asset,with less than 20 percent of them underwater and the prices starting to inch up the economists are waiting for a spark to ignite the sales rally in the housing market,thats not going to happen,regardless of which direction the indexes are pointing the bubble bursting is fresh in every ones memory,and painful,what is the difference between a recession and a depression? a recession is when your neighbor loses his job,a depression is when you lose your job.That might seem a wee bit sarcastic but it really is true.

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