You’ll love this one from the Austin Business Journal. The number of housing permits has fallen in the Austin, TX area, and job creation has slowed considerably. However if you combine the two, Voilà! Things start looking much better:
While the last two years of declines in new housing activity have been difficult for Central Texas, some housing market indicators show Austin is relatively balanced, according to a report from the Austin Chamber of Commerce.
Residential permits for 2008 will be at their lowest level in decades, at approximately 14,000 units, a total similar to the activity of the late 1990’s. But, according to research the Chamber cites from Residential Strategies Inc., Austin’s “employment change to residential permit ratio”–measured over a nearly two-decade period–is at a healthy 1 single family permit to 2.15 net new jobs.
The employment change-to-permit ratio is one metric used to examine the balance between supply and demand in the market, based on the assumption that new jobs create demand for new homes. In other words, for every 2.15 new jobs created since 1990, one single-family residential building permit has been issued.
So even though the job market has gotten much worse, we can at least be happy that the housing industry is not currently building an excessive amount of inventory for the people who aren’t coming. I suppose that’s good news, but calling the current housing market "healthy" is a bit of a stretch- no matter what the metric.
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twist -
Looks like they need a happy-stat where you came from. This is presently Google’s top biz story.
“Phoenix Leads U.S. Home Price Decline as Lenders Unload Houses”, by Kathleen M. Howley, Bloomberg, December 30, 2008.
Who comes up with this stuff?
Oh, that’s priceless!
Take two negative metrics and turn them into one neutral/positive metric by ignoring their indidivual magnitudes and just using their *ratio* to show that they’re both getting worse at about the same rate.
And that’s … a good thing??
it’s really simple math. everyone knows that when you multiply a negative by another negative, you get a positive. -2 x -2= 4. i know igor….kinda “silly”
“happy-stat”. LOL, I like that term.
What happens when there are no jobs left, and there are no housing starts? Will they be in balance?
Most newspapers are at or near bankruptcy. Accordingly, they have gone beyond the directive to not bite the had that feeds them (classifieds for real estate and autos), and begun to actively promote these industries through “journalism”. It’s going to be quite a year!
Tobby-
Simple. There will be “pent-up demand” which will drive prices up, and then we’ll all be sorry we didn’t get on the ground floor.
[I just thought I'd give the Happy-talkers the day off, it is the holidays!]
Twist it’s hard to get on the ground floor when it keeps falling onto the one below it.
I would also like to wish you a very Happy New Year.
How far will home prices fall from the beginning of 2009 to the end of 2009? Will it be 20, 25 or 30%?