Consumers And Construction Workers Feel It's A Recession

| About: WCI Communities, (WCIM)

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

Quote of the Day

“The last few days have devastated the American consumer. They all feel poor.” - Walter Loeb, president of Loeb Associates, a consultancy, who said he worried that the constant drumbeat of negative news about the economy was becoming a self-fulfilling prophecy. (NY Times, Oct. 5)

Macro Effects of the Housing Slump

For Bailout To Work, Housing Market Needs To Mend. “The problem is the lending freeze has made getting a mortgage loan tough for everyone except those with sterling credit. That means it will take several months or longer to pare down the glut of houses built when times were good — and those that have come on the market because of soaring foreclosures — before home prices start appreciating. Housing is a critical component to the U.S. economy and by extension the availability of credit. Roughly one in eight U.S. jobs depends on housing directly or indirectly — from construction workers to bank loan officers to big brokers on Wall Street.” (AP via Yahoo! Finance, Oct. 5) 

Subprime Mortgage Defaults Rise In Salem.  “University of Oregon Index of Economic Indicators: An August report that tracks economic indicators such as building permits and unemployment claims said their sustained weakness is "consistent with ongoing recession in Oregon.”  In the Mid-Willamette Valley, home sales are down 35% from last year. The average home price fell for the first time in four years by $9,000, to $240,000. And new home construction permits in Salem are down 37% in a year. Statewide fallout from the housing market's peak has seen job losses in key industries, such as construction, real estate and finance. In August, the state's unemployment rate rose to 6.5%, its highest level in three years.” (Statesman Journal, Oct. 5)

Full of Doubts, U.S. Shoppers Cut Spending. “In addition, household net worth, which greases spending, fell $6 trillion over the last year, with $1T of that in just the last four weeks, said Mark Zandi, chief economist at Moody’s Less than a month ago, Nigel Gault, chief domestic economist at Global Insight, a forecasting service, predicted that domestic economic output would rise 1.2% in Q3. “At the moment I’m running close to zero,” he said, “and maybe a negative.” (NY Times, Oct. 5)

Haverstraw Town Proposes 12 Percent Tax Increase. “New York State: Residents can expect about a 12% tax increase under the proposed 2009 Haverstraw town budget. Haverstraw town Supervisor Howard Phillips this week released his $33 million spending plan, saying that the proposed increase in town taxes is the first in three years… The town counted on $35M in revenue from WCI Communities (WCI), which had proposed the 500-unit housing project on the town-owned Letchworth Village property, to pay back the debt at once. The developer, however, withdrew the plans several months before it sought bankruptcy protection, leaving the town with the debt.” (Hudson Valley Journal News, Oct. 2)

Construction Jobs Hard To Come By This Summer. “Homebuilders slowed production nearly 3% in July and, in doing so, helped send 22,000 more construction workers to the unemployment line. At a time of the year when residential and commercial construction should be peaking, the homebuilding industry is in its worst slump since the Great Depression and many commercial projects have been canceled or postponed until the economy rebounds. This double whammy has made it a cruel summer for construction workers. The industry's July unemployment rate of 8% is the highest in 13 years. Across the nation, some 783,000 jobless laborers, carpenters, plumbers, pipefitters and other tradesmen are looking for work.” (Idaho Statesman, Oct. 3)

Get Seeking Alpha's housing market coverage by email -- it's free and takes only seconds to sign up.