Is The Housing Market Crimping The Economy?
Thursday, May 12, 2011
SAN DIEGO The continuing slide of the U.S. housing market is a good-news bad-news scenario. Whether it’s good or bad depends on whether you’re buying or selling. It may also depend on whether you think low housing prices are a drag on the economy.
On that last point, I spotting a blog post from the Economist magazine that took issue with a broad statement on the subject made by a TV news anchor. It was the kind of statement made by journalists who quote nameless “experts.” In this case, the experts said our sluggish economy won’t improve much until the housing market bottoms out sometime next year.
The Economist blogger argued a slow housing market is only bad for the economy if we assume new home construction is an vital part of the GDP, and if we assume high home prices will encourage people to buy lots of stuff by borrowing against their homes. That was a common thing in San Diego during the boom years. Not sure if it was a good idea.
On the SD home front, the San Diego Union Tribune ran a story, based on Census figures, showing the rate of home ownership in San Diego is down to a little over 54 percent. It was more than 58 percent during the housing boom. No big surprise there.
Nationwide the rate of home ownership is 66 percent. But can they drive to the beach in under half an hour?