Southern Oregon Economic Summit

David Crowe: Starts with macroeconomics, shows GCP growth 2000-2013. Continued softness, Washington: raises taxes, pulling back spending. That creates a drag.
We have resolved a lot of things that caught deep, recession. 2014 will see return of better growth rates.Recovery has been erratic. Housing recovery didn’t happen, economy was a lot sicker than people thought. Now housing is growing stronger, relative to rest of economy 3-4-5 times faster than other sectors and it helping the rest of the economy.
He says 100 new homes creates 300 jobs.
Housing is usally nearly 6 percent of the economy, it’s only 3 percent right now.
The echo boom has been larger than baby boom. People 25-34 in prime household formation. In some cases it is a rental. Household growth, growing 1.4 million in mid-2000s. That figure collapsed to 500,000 “If you didn’t have a job, you didn’t move out of mom’s basement.” Back up to 800,000 annually, should be 1.2 million, so we have pent up demand.
2007-2010 fewer home owners and a lot more renters — a lot of defaults. In 2011-2013 Renters still lead way, but we are seeing a net addition of total owner-occupied houses.Combination of people losing home through home-owner distress and younger people not getting into homes has slowed growth rate of people buying homes.
General migration has been back to South and West.
However, North Dakota, Colorado, Utah and Texas are far ahead of the pace — so is Washington, D.C.
There is a jump in the number of people saying they plan to buy in next 6 months.
National index showed house prices dumped from late 2006 to Jan. 2011 It was flat until early 2012.It’s been rising for 15 months.
House price to income to ratio. People used to spend 3 times income for houses, it reached 4.7 during the boom. That’s not good, says Crowe. It was 6.4 percent in Jackson County.
ousing prices: Medford had much higher growth in prices — nationally it was 150 percent at one point.

Improving markets index, started with 12 out of 360. Didn’t mean it was well, but was getting better. We said it was going to be one by one market, and eventually see more There are now 260 out of 360. Medford made the list in January
of 2013.

Delinquencies nationally are still higher than should be. Still somewhat of a problem, but much better and concentrated in five states; Oregon is better than national average.
New homes starts continue, but aren’t dramatic. Existing OK.
How do volumes compare? The country will be at 71 percent, Oregon should see 76 percent of historic housing starts.
Energy state have shown solid recovery and will be back at normal levels in 2014.
Illinois, Kentucky lead states lagging.

What do you build?
Currently 1,906 square feet, desire is 2,226 and reality of 2012 builds is closer to 2,500. That’s because of who can qualify for loans. Most buyers want 3 or 4 bedrooms, and 2 1/2 bathrooms.
Living space and number of rooms is a guiding characteristic 65 percent of time; energy efficiency is growing.
What is most wanted by buyers: Energy-star rated appliances; big spaces for eating in kitchens; closets and bath shower and tub stalls are desired in the bathroom.
Unfinished spaces are — basements, attics — one trade off people want. They are also willing to drive to shop and work.
High-energy homes with low utility bills is most desirable followed by size of master bedroom.
People want environmental efficiency without paying more.
If can save $1,000 annually on energy cost, how much more would you pay for house. The median response was $7,000.
Some 56% of people don’t want to live in high-density areas.
Tight credit, appraisals, labor, material prices and federal policies remain major issues for home builders and buyers.
Trouble borrowing hasn’t completely gone away. Appraisals left over from the crash. Workers had to find jobs somewhere else and it’s hard to get them back. Materials hard to come by because plants were closed, the limited supplies are being bid up. Those costs are lost in the appraisal process.
Crowe’s blog site:

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