There’s a lot of debate lately about whether or not the stimulus, a.k.a. the American Recovery and Reinvestment Act of 2009, is working.
Some in the construction industry say it is, that projects are being let and contractors have a plethora of projects on which to work. Others in the industry say it isn’t working, that there are too many resurfacing jobs or rumble strip installations, rather than bridge work or extensive road widening projects. Either way, the true stimulus must eventually come from the housing market.
The housing market busted, or so we were told. But busted from what? An inflated sub-primed mortgaged price party that raved from about 2004 to 2007. Housing prices in some areas rose an average of more than $100,000 to $150,000 — many for what most people would consider starter homes. Trouble is that prices still have not fallen below what they were prior to the incredible price increases.
The housing market affects thousands of others (carpentry, electricians, home suppliers, exterminators and so much more), and when first-time home buyers can’t afford a 20 percent down payment and the ensuing high mortgage payment, they simply can’t buy, or if they do they strap themselves so much that they can’t afford much else. Then when you factor in abysmal job numbers, well, that’s a formula for economic malaise. If housing prices come down to about three times the U.S. family median income (right now, there’re at about 4.5 times), then we’ll see a turnaround in our economy. But that will be up to the real estate industry, the sellers and the bank, the folks that helped get us into this mess in the first place.
On another matter, please set your schedules for this year’s N.Y.S. Highways & Public Works Expo. The show will be held October 21 and will be once again at the New York State Fairgrounds in Syracuse. More details about the show will be in next month’s issue of Superintendent’s Profile. Have a great rest of the summer. P