a quick update today: as reported on tuesday, the latest case-shiller housing price index taunts us with a mixed report.
the good news? phoenix, denver, miami all seem to have hit their bottom and are rebounding since the same time last year. this is relative of course - phoenix and miami were brutally beaten down from their peaks. but they're heading in the right direction.
what's also encouraging are the stats about home values relative to a 2000 baseline. by that comparison, the top 20 markets are still up 30+% from their prices then. washington d.c. and new york are considerably up - 70+% in both cases. this kind of holding pattern is a good thing overall.
now the bad news... if you happen to live in atlanta (like your intrepid soothsayer)... well, the only housing market potentially worse off than yours is detroit. in fact, in year over year decline, atlanta leads the top 20 markets by a healthy margin with a slide of -17.7%(something confirmed by my tax assessment which arrived this week). in fact, even though detroit hit a deeper bottom, it's gotten there faster and is at least rebounding (being up 2.6% over the past year). it's not a stretch to say our little patch of georgia may, in fact, be the ultimate poster child for the excesses of the housing boom when all is said and done.
why does this matter to you? the housing market is one of the key bellweather indicators for overall construction spending. simply put, rising home values do create more household wealth (even in artificial excess). when you have as many foreclosures and bank failures related to the kind of decline atlanta, detroit and vegas have experienced, it's exceedingly difficult to attract new capital to build unless it's in apartments or discount chain stores. finance needs to see the bottom to know how to assess the risks involved with lending. without lending, construction dries up. without construction... well, it's a lot harder to be in architecture...
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