The Cost of The Housing "Bubble"
"This is going to be a tough year for New Home Builders ," said Jim Wood, Director of the Bureau of Economic & Business Research @ the University of Utah.
Mr. Wood was quoted in an article in the Salt Lake Tribune that said among other things that from January through September, New Home Builders took out permits for the construction of 8530 single family homes. According to the Construction Monitor, which tracks such things thats down 30% from last year which is about 3655 houses that didn't get built in the Salt Lake Valley.
The article was very sympathetic to the local builders and the hardship this market has created for them. I guess we should know about that, in fact I think I'll write some stuff about that later. But for Now......
WHAT ABOUT US???? What does the loss of 3655 houses mean to us, our area, our economy, our jobs, our tax base.? Believe me it is NOT insignificant. Check out what the National Association of Home builders (NAHB) says about that.
Impact of not building 3655 New Homes for 9 months:
Jobs: Nearly 9000 jobs lost
Wages: $288,745,000.00 in payroll checks not written, not cashed. (thats 288 Million)
Taxes, Fees, Assessments: $153,510,000.00 not collected. Much of which was budgeted to run City and County Government.
Related Expenditures: $32,547,775.00 not spent, based on the average expenditure of new home owners during first year of ownership.(furniture, landscaping, upgrades, tools, etc.)
So you see, it's not just the Real Estate Agents, lenders, appraisers, home inspectors, Title Companies and the more obvious businesses that are hurt when housing hits a slump. It effects all of us.
To compound the problem, I had heard a number years ago that was an indication of the number of hands one dollar of income passed through. I think the number was 7, If anyone knows give me a shout.
I hope this puts in perspective, the importance of the home building business to our communities, and why a slow down like we are experiencing, can be so devastating.
The real question I have, is did the slow down create the news or the news create the slowdown?
Thanks for listening!!! To find out more about New Construction visit my web-site.