It is clear in retrospect that in parts of the Sun Belt, the economic dependence on construction reached unhealthy levels in recent years.
File that sentence under “stating the obvious.”.
The reporter seems to have overlooked the fact that some people found it obvious — not in retrospect, mind you, but in real time. One only needed to have looked at the data and then compared it to historical metrics to reach the obvious conclusion that housing was way off kilter. What was taking place was a backwards, real estate driven economy.
Here’s an excerpt from the Times:
“In a little more than three years, the Phoenix area has gone from the hottest of Sun Belt hot spots to one of the nation’s economic disaster areas. It is not alone in its rapid fall.
After riding high during the boom, the Las Vegas area, parts of southern Florida, and Southern California’s inland counties have also been brought low by plunging payrolls, billions lost in housing wealth, a continuing epidemic of foreclosures, record government budget deficits and stagnating populations.
These areas share one thing besides their warm climates. To a degree unmatched in the rest of the country, their recent prosperity was built not on manufacturing, technology or natural resources, but on construction and real estate — growth for its own sake.
As other areas tasted the excesses of the housing boom, they gorged on it. From 2002 to 2006, about 20 percent of private industry growth in the United States was tied to real estate and construction. In the Phoenix area, almost 36 percent of growth in the private economy during that period — more than $34 billion worth — came from real estate and construction.”
The entire piece — the print version was buried behind a weird headline in the Business section House by House, A Sun Belt Setback — is well worth a read.
Half of New Jobs Are Real Estate Related (May 27th, 2005)
Real Estate and the Post-Crash Economy (December 29, 2006)
The Ongoing Impact of the Housing Sector (August 24, 2007)
Construction That Fueled Growth in the Sun Belt Slows
JOHN COLLINS RUDOLF
NYT, August 28, 2009