Noodling Housing, Cars, Cities and Statistics

Housing and Supertankers - A lot in Common

Housing – The Builder Supertanker is Slowly Turning

Here are a few articles about housing and how it is slowly coming back. Check out last week’s blog for more.

Lennar:

To Survivors Go the Spoils

 

Prices

Recovery

And here’s a great snap shot of where we are:

http://trends.truliablog.com/2012/09/housing-market-leaps-to-42-back-to-normal/

Driverless Cars

I am not sure how comfortable I am with this. This week “range anxiety” has been the phrase of the week (Do I have enough electrons left to get to Grandma’s house?). What was also very interesting is the discussion of the non-stop evolution of a car that will get you there while you take a nap, or text, or read a book. While the state of California itself seems to be the embodiment of a driverless car, Gov. Brown will sign a bill to OK the real thing: Driverless cars. (GO HERE) . 

Here is a video that will scare or intrigue you: (article)

http://www.youtube.com/watch?v=cdgQpa1pUUE

San Jose

Readers know how much I just love lists. Especially those that tout one city over another or in some cases demean another city by pointing out it's the “worst place to ….” whatever.

In this latest list the “Richest Cities,” are pointed out. Since this is grammatical as well as factually incorrect (none of these “cities” are rich, and in fact most are failing). But in comparison to the rest of the state I guess they are “rich.” What is really listed is how financially successful the region’s employed are. (GO HERE)

Some Uncomfortable Stats

John Mauldin is without a doubt my favorite economic writer, he is witty, prolific, very smart, and very right (most of the time) (GO HERE) In my weekly missive from John titled “What If The Fed Has It ALL Wrong,” he lays out an interesting series of graphs and table (he loves these things), worth looking at. 

But he also noted the following:

Meanwhile, the less affluent, the other 80% – some 250 million people – are little concerned by an eventual wealth effect but highly, directly, and immediately impacted by the side effects of all these QEs, namely rising commodity prices and near-zero interest rates. 

Consider that:

• 15% of the US population lives in poverty.
• 44% of those 46.2 million poor Americans are in "deep poverty," which is half the level of the poverty line, defined as $22,811 for a family of four.
• More than 45 million Americans are in the food-stamps program, which is 15% of the population, compared with the 7.9% participation from 1970-2000. Food-stamps enrollment has been rising at a rate of 400,000 per month over the past four years. Just last month (August), nearly twice as many people went on the food-stamps program (173,000) than managed to find a new job (96,000).
•  More than 11 million Americans are collecting federal disability checks.
• 11.2% of the labor force is out of work, if we include the 7 million people no longer seeking employment. This number (over 17 million workers) is unchanged since 2009.
• Full-time employment remains 1.4 million below its 2009 level. Needless to say, part-timers earn and spend considerably less.
• Most of the 43.5 million American retirees must cope with nominal interest rates, near zero through 2015, when inflation is around 2.0%.

We have a very deep hole to climb out and all the blaming going around accomplishes little. The business climate has to change from one of pointing out inequities to one that promotes accomplishment. The American public is not a science or economic experiment.

Stay Tuned  . . . .

And why does it have to be Texas?

Almost a year ago to the day, I declared that the master planned community was dead (click here). And now I read that there are Dr. Frankensteins putting electrodes to the necks of moribund and dead communities hoping to jolt them to life - in Texas. If there is one aspect of the development community that is never ending is their optimism, even in the face a dead market. I still maintain, as then, that this particular institution, these master plans, these new towns, these development prayers will remain dead for a long time. And I’m an optimist.

Sure, there may be a few sparks that ignite hope, but a sustained life will be difficult. The complexities of gaining approvals, entitlements, and funding are just a few of the obstacles to overcome. But it is the market, as always, that determines whether the carcass on the table will rise. We can go through all the political dancing and written reports and EIRs but, without the customer, nothing will succeed. Exceptions are very few to the point of being miracles when you see them. They are like Lazarus from the grave.

And why does it have to be Texas?

If you peruse the economic scene and push your way through the babble on the tube and elsewhere, something does seem to be happening, a spark is seen in the dark night. Where confidence is a strong, things can happen. While other states fight amongst themselves on how to wring and twist the last dollar out of their job creators, there are a few states with the clarity to see the opposite by encouraging business’s participation in their state’s economy. By keeping regulations within sane limits and watching how much silly money is spent, business will move toward them, like magnets that draw iron. They will make jobs, they will require housing and services, and they will need planned communities.

The process is more akin to shocking the body with low voltage over a long and sustained period, slowly awaking the beast. It is a methodical process with long term solutions in sight. Lightning strikes to tall towers may do great things for politicians but they do little for the long term economy.

And why does it have to be Texas?

As a Californian by choice, it is very sad and distressing to see how such a wonderful resource, California, is being squandered. We have become timid and fearful; we put off today hoping for a better solution tomorrow. We over regulate with thousands of associations, groups, councils, commissions, and boards. We are afraid to put the electrodes to the neck of the beast in fear of offending someone. We open little economic free fire zones, then pull the ammunition. We attack the redevelopment districts then offer nothing to replace them. We are so afraid that one group will get more than its “fair” share; so no one gets to eat. The whole state should be declared an economic free trade zone!

A client from out of state belittled and demeaned California. He effectively said it was done, toast, dead, put a fork in it. His friends from Jackson Hole, ex-Californians, only told tales of woe and how proud they were to escape. In my opinion they are quitters, they made their pile here in the state, put many of these wonderful politicians in office, then high-tailed it out here, wagging their fingers, clucking their tongues. Shame, shame.

And why does it have to be Texas?

There must be a slash and burn mentality in California, clear the deadwood, pull a Minnesota, develop a New Jersey attitude, find the swagger and the first-over-the-top leadership we once had. We are competing with every state in the union for jobs; in fact whole regions are competing with us. Be warned, understandings are being made between states, alliances are slowly forming, i.e. Illinois, Wisconsin, Indiana, Michigan; the southeast, and the northeast corridor. California is a state, a region, and an international competitor. It is an economy onto itself, but looks more like Greece or Portugal. It is much easier than we think if we can only get out of our way.

And why does it have to be Texas?

Think about it.

Stay tuned . . . .