Comments on: Phoenix: Our Strong Economy Won't Save Us http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/ Fri, 18 May 2012 02:39:21 +0000 hourly 1 http://wordpress.org/?v= By: zapoteca http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8693 zapoteca Sat, 17 Nov 2007 05:23:43 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8693 I wish there were a blog like this for Connecticut. I feel like I have been dancing on a fence between recessions all my life. I well remember the early 80s recession. It drove 150,000 professional job cuts between GE and IBM. In CT, job-wise, that recession lasted till the 90s recession, which deepened the jobs gap. That gap lasted until 2003, when the Governor boasted a turnaround, with 1500 professional jobs created that year. It made for a mean spirited level of discourse. The kids leave. Nobody is moving in. The house prices, which remained stratospheric for six years after the onset of the recession, crashed in 1988. Naturally, they ran up again with no fundamental justification other than easy credit and a vengeful need to outdo the Joneses, and are once more astronomical. With so few comps, they stick. Once you are stuck and middle aged in an area with dry rot, how do you get out? I was lucky. After trying like heck for over a decade, I escaped to metro DC, glad to get out alive. In an area where people can work, and make ends meet, there is a different energy. Conversations are worth having. The level of discourse rises. I rent. Perhaps the house prices will come down here, perhaps they won't. I am picking up the pieces. I wish there were a blog like this for Connecticut. I feel like I have been dancing on a fence between recessions all my life. I well remember the early 80s recession. It drove 150,000 professional job cuts between GE and IBM. In CT, job-wise, that recession lasted till the 90s recession, which deepened the jobs gap. That gap lasted until 2003, when the Governor boasted a turnaround, with 1500 professional jobs created that year. It made for a mean spirited level of discourse. The kids leave. Nobody is moving in. The house prices, which remained stratospheric for six years after the onset of the recession, crashed in 1988. Naturally, they ran up again with no fundamental justification other than easy credit and a vengeful need to outdo the Joneses, and are once more astronomical. With so few comps, they stick.

Once you are stuck and middle aged in an area with dry rot, how do you get out?

I was lucky. After trying like heck for over a decade, I escaped to metro DC, glad to get out alive. In an area where people can work, and make ends meet, there is a different energy. Conversations are worth having. The level of discourse rises.

I rent. Perhaps the house prices will come down here, perhaps they won’t. I am picking up the pieces.

]]> By: RunnerInPeoria http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8692 RunnerInPeoria Thu, 15 Nov 2007 20:56:20 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8692 Yossarian: I think think you nailed it. The AZ economy is too closely tied to a single industry: housing. Everyone knows the incredible risk when a single point of failure exists and by no means is AZ exempt from this. I work for a company which sells services to Fortune 500 companies. At a recent meeting, the top 50 cities in the US in terms of Corporate Office presence were listed. Phoenix does not even break the top 50. In fact, Omaha, NE has more corporate offices than Phoenix. Phoenix is really a collection of small boutique type offices or retailer mega-marts whose pay scales can not compete with larger corporations. Lower pay combined with little chance for upward mobility really restricts the amount of true, long term economic growth for the area. My wife and I moved here 7 years ago because of work. While in our particular case it was a good move. We are, however, looking to leave at our first good opportunity. We are lucky: our careers are in high demand and we can work almost anywhere. Just an opinion, folks, nothing more. Yossarian:

I think think you nailed it. The AZ economy is too closely tied to a single industry: housing. Everyone knows the incredible risk when a single point of failure exists and by no means is AZ exempt from this.

I work for a company which sells services to Fortune 500 companies. At a recent meeting, the top 50 cities in the US in terms of Corporate Office presence were listed. Phoenix does not even break the top 50. In fact, Omaha, NE has more corporate offices than Phoenix. Phoenix is really a collection of small boutique type offices or retailer mega-marts whose pay scales can not compete with larger corporations. Lower pay combined with little chance for upward mobility really restricts the amount of true, long term economic growth for the area.

My wife and I moved here 7 years ago because of work. While in our particular case it was a good move. We are, however, looking to leave at our first good opportunity. We are lucky: our careers are in high demand and we can work almost anywhere.

Just an opinion, folks, nothing more.

]]> By: puravida http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8691 puravida Thu, 15 Nov 2007 19:27:25 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8691 I am an import to Phoenix, I have lived here a little over 3 yrs. I have driven around the area and I see cows, crops, Freescale, Intel and what was booming construction. I keep asking people that have lived here for years: What is the economy of Arizona? Who are the employers that provide the thousands of high paying jobs in order to afford all these homes? All these "new" people moving here, where do they get the numbers? Are they coming here to work at their new high paying job or at a "would that be paper or plastic" job and buy a 250K home? Don't get me wrong, it's an honest job, but you would have to be dishonest to buy a home. So, I ask again, what really brings people here that would want to make people stay? I am an import to Phoenix, I have lived here a little over 3 yrs. I have driven around the area and I see cows, crops, Freescale, Intel and what was booming construction. I keep asking people that have lived here for years: What is the economy of Arizona? Who are the employers that provide the thousands of high paying jobs in order to afford all these homes? All these “new” people moving here, where do they get the numbers? Are they coming here to work at their new high paying job or at a “would that be paper or plastic” job and buy a 250K home? Don’t get me wrong, it’s an honest job, but you would have to be dishonest to buy a home. So, I ask again, what really brings people here that would want to make people stay?

]]> By: nordag http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8690 nordag Thu, 15 Nov 2007 17:54:21 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8690 Amen to that. It appears some sellers, maybe many sellers, will have to make hard choices BECAUSE of bad planning. Amen to that.
It appears some sellers, maybe many sellers, will have to make hard choices BECAUSE of bad planning.

]]> By: twist http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8689 twist Thu, 15 Nov 2007 17:40:09 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8689 Nordaq- It's a lot easier when your financial decisions are a result of choice, instead of bad planning. My husband and I are not only happy renters, but we've sat with the kids and planned the most modest Christmas we've had in years. Everybody's been having fun planning how we are doing it on the cheap. I feel for those who end up unhappy with those choices because they were thrust upon them. Everyone ought to be broke at some point in their lives though- it teaches you that it's not the end of the world, and that you can pick up the pieces. You end up a little older, and a whole lot wiser. Nordaq-

It’s a lot easier when your financial decisions are a result of choice, instead of bad planning.

My husband and I are not only happy renters, but we’ve sat with the kids and planned the most modest Christmas we’ve had in years. Everybody’s been having fun planning how we are doing it on the cheap.

I feel for those who end up unhappy with those choices because they were thrust upon them.

Everyone ought to be broke at some point in their lives though- it teaches you that it’s not the end of the world, and that you can pick up the pieces. You end up a little older, and a whole lot wiser.

]]> By: nordag http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8688 nordag Thu, 15 Nov 2007 16:10:37 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8688 Twist- My wife and I did have similar experiences during the late 70's and early 80's in Chicago. She worked for a large bank and I was going to school at night while working at a much smaller bank during the day. We were frustrated with the cost of housing and in 1986 decided after a little research to move to.....Arizona. The house we bought in Mesa was a deal compared to anything you could find in the Chicago area at the time. Fast forward to 2007, were renting again. This time were happy about it. One kid graduating from ASU next month, 2 more in the pipeline. Many lessons learned. Twist-
My wife and I did have similar experiences during the late 70′s and early 80′s in Chicago.
She worked for a large bank and I was going to school at night while working at a much smaller bank during the day.
We were frustrated with the cost of housing and in 1986 decided after a little research to move to…..Arizona.
The house we bought in Mesa was a deal compared to anything you could find in the Chicago area at the time.
Fast forward to 2007, were renting again.
This time were happy about it. One kid graduating from ASU next month, 2 more in the pipeline.
Many lessons learned.

]]> By: twist http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8687 twist Thu, 15 Nov 2007 13:35:12 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8687 Yossarian- What amazes me is how many folks who are over 40 have blocked that time in their minds. Mr. Twist and I were also recently out of college and looking for work in 1982. We thought with our newly minted diplomas we should be able to find good jobs. We even moved to Denver, as we heard that the economy was doing so well there. I ended up getting a job typing, and my husband got a job delivering office supplies- and we were lucky to get even those jobs. We moved to Japan in 1983 to teach English because we were tired of not being able to make ends meet in the U.S. I have to believe that many of my peers had similar experiences, but you wouldn't know it to talk to them. It wasn't just the under 40 crowd that's been out running up credit cards and getting wonky loans. This ludicrous collective amnesia is what inspired the change on our masthead. You think people would learn. Yossarian-

What amazes me is how many folks who are over 40 have blocked that time in their minds.

Mr. Twist and I were also recently out of college and looking for work in 1982. We thought with our newly minted diplomas we should be able to find good jobs. We even moved to Denver, as we heard that the economy was doing so well there. I ended up getting a job typing, and my husband got a job delivering office supplies- and we were lucky to get even those jobs. We moved to Japan in 1983 to teach English because we were tired of not being able to make ends meet in the U.S.

I have to believe that many of my peers had similar experiences, but you wouldn’t know it to talk to them. It wasn’t just the under 40 crowd that’s been out running up credit cards and getting wonky loans.

This ludicrous collective amnesia is what inspired the change on our masthead. You think people would learn.

]]> By: Tyrone http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8686 Tyrone Thu, 15 Nov 2007 07:02:59 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8686 This was a pretty good article. Just popped up on the front page of Yahoo Finance. Talks about prices vs rents, affordability, lax lending standards, etc. http://tinyurl.com/37juyt This was a pretty good article. Just popped up on the front page of Yahoo Finance. Talks about prices vs rents, affordability, lax lending standards, etc.

http://tinyurl.com/37juyt

]]> By: stfram http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8685 stfram Thu, 15 Nov 2007 06:27:04 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8685 Sounds just like Tucson now. Pima County is looking at major budget shortfalls due to the housing slowdown, and it's only gonna get worse. Of course, they're threatening all sorts of service cutbacks, but don't seem at all interested in trimming fat NOW. Sounds just like Tucson now.

Pima County is looking at major budget shortfalls due to the housing slowdown, and it’s only gonna get worse.

Of course, they’re threatening all sorts of service cutbacks, but don’t seem at all interested in trimming fat NOW.

]]> By: Yossarian http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8684 Yossarian Thu, 15 Nov 2007 06:24:42 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8684 Twist: Americans younger than about 40 have no memories of an actual, soul-killing recession. I remember 1982 in Phoenix quite well... as a recent college grad, it was hard to find work locally, so I moved to California. There were tent cities in Texas. Oregon had 13 percent unemployment, lumber counties perhaps seventy percent. Families with kids were living in National Parks... last year I talked with Park Rangers in Oregon, and they remembered. National unemployment was almost eleven percent.. that's when they measured it like it mattered. Arizona had unemployment of more than ten percent. I still remember the headlines calling out how many more people would be laid off at Motorola. But my family never really blinked. We were there before the recession, and poor. We were there after the recession, and still working class. It might be true that more people have moved OUT of the Phoenix area than have ever stayed. What kind of societal memory can you develop with that story? The kind of memory that sees no irony in the landscape of beige concrete buildings in Tempe giving way to abject, historic poverty in Guadalupe, to give way to ahistorical, unbelievable, unsustainable Awatukee. But a recession is the solution. It is not the problem. Be good. Twist:
Americans younger than about 40 have no memories of an actual, soul-killing recession.
I remember 1982 in Phoenix quite well… as a recent college grad, it was hard to find work locally, so I moved to California.
There were tent cities in Texas. Oregon had 13 percent unemployment, lumber counties perhaps seventy percent. Families with kids were living in National Parks… last year I talked with Park Rangers in Oregon, and they remembered.
National unemployment was almost eleven percent.. that’s when they measured it like it mattered.
Arizona had unemployment of more than ten percent. I still remember the headlines calling out how many more people would be laid off at Motorola.
But my family never really blinked. We were there before the recession, and poor. We were there after the recession, and still working class.
It might be true that more people have moved OUT of the Phoenix area than have ever stayed. What kind of societal memory can you develop with that story?
The kind of memory that sees no irony in the landscape of beige concrete buildings in Tempe giving way to abject, historic poverty in Guadalupe, to give way to ahistorical, unbelievable, unsustainable Awatukee.
But a recession is the solution. It is not the problem.
Be good.

]]> By: twist http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8683 twist Thu, 15 Nov 2007 03:24:32 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8683 Yossarian- We've made "moving to Arizona" a major industry here, and for all we hear about how everyone wants to move here, not everyone wants to stay. I think the figure is something like one in three move-ins moves on. That means one of our largest "industries" is threatened. A lot of folks moved here for the jobs, and when the jobs are gone, they will move on- they have no roots here. I look around at restaurants and movies and see a whole bunch of folks that look at leat my age or older. I keep thinking, "I can remember economic problems and housing downturns in Phoenix, what is wrong with the memories of these folks?" Yossarian-

We’ve made “moving to Arizona” a major industry here, and for all we hear about how everyone wants to move here, not everyone wants to stay. I think the figure is something like one in three move-ins moves on. That means one of our largest “industries” is threatened.

A lot of folks moved here for the jobs, and when the jobs are gone, they will move on- they have no roots here.

I look around at restaurants and movies and see a whole bunch of folks that look at leat my age or older. I keep thinking, “I can remember economic problems and housing downturns in Phoenix, what is wrong with the memories of these folks?”

]]> By: Yossarian http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8682 Yossarian Thu, 15 Nov 2007 02:54:38 +0000 http://housingdoom.com/2007/11/14/phoenix-our-strong-economy-wont-save-us/#comment-8682 This is what I've always said... The Phoenix area 'GDP' is maybe 35 to 40 percent dependent on housing and construction. I always found this to be horrifying. This means that eternal expansion and suburbs are supposed to be good, and 'keep the economy growing'. A loss of any substantial fraction of that GDP spells, doom. Or, as I like to tell my relatives, friends and family in Phoenix... you will see Depression-era levels of unemployment in Phoenix before 2009. For those of you not in Phoenix... the Valley of the Sun is the poster child for the death of the FIRE economy. Even doom and gloomer James Kunstler often comments on how 'hosed' Phoenix is. Too bad. It was a farm town, mostly.. in my youth. Now, it will join the list of 'Hohokam' societies. Many years from now (ten?), examining the ruins of Phoenix.... archeologists will ask... 'exactly what did they worship here.... houses and sports teams?' This is what I’ve always said… The Phoenix area ‘GDP’ is maybe 35 to 40 percent dependent on housing and construction. I always found this to be horrifying. This means that eternal expansion and suburbs are supposed to be good, and ‘keep the economy growing’. A loss of any substantial fraction of that GDP spells, doom.
Or, as I like to tell my relatives, friends and family in Phoenix… you will see Depression-era levels of unemployment in Phoenix before 2009.
For those of you not in Phoenix… the Valley of the Sun is the poster child for the death of the FIRE economy. Even doom and gloomer James Kunstler often comments on how ‘hosed’ Phoenix is.
Too bad. It was a farm town, mostly.. in my youth. Now, it will join the list of ‘Hohokam’ societies. Many years from now (ten?), examining the ruins of Phoenix…. archeologists will ask… ‘exactly what did they worship here…. houses and sports teams?’

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