Strong Southern Economy Buoys Housing Market
An artilce in today's Wall Street Journal discusses how median sales price of previously owned homes in the South rose by 3.2% from the year earlier. Nationally, this number was a mere .9% from last year. The South also fared better in terms of sales of new homes, building permits, and new residential construction. The article claims this is due to population growth and the fact that housing in the previous 5 years hasn't been as hot in the South as in other regions. I would say population growth is playing a large part in this, but the underlying question you have to ask yourself is; Why is the population growing? The answer is multi-faceted. For one, the Southern economy is booming. It has been overlooked and undervalued for decades and is finally beginning to implement the infrastructure to be efficient and worthy of business investment. Second, as the political landscape moves more to the conservative side, people are going to want to be around people with like beliefs and values. More importantly, conservatism is good for business. For conservatives, there are few better places than the South. Local leaders tend to be conservative (even if they call themselves Democrats) and conservative leaders, of course, are usually good for business. For instance, the only three states in the Union without a state income tax are Texas, Florida, and Tennessee. They are reaping the economic benefits of greater business investment due to low tax rates. Consequently, Texas and Florida have the two fastest growing state economies in the country and Tennessee is quickly moving up to join them. The South also possesses cheaper labor than the rest of the country due to lack of formal education in much of the current labor force. Employers will only be able to enjoy this for a limited time because the greater economic activity will trickle-down and education will improve shrinking the current education and wealth gaps. The bottom line here is that the Southern economy is going through a multi-year, possibly even decade or more, boom. Investment in the area will pay off sooner rather than later.
An artilce in today's Wall Street Journal discusses how median sales price of previously owned homes in the South rose by 3.2% from the year earlier. Nationally, this number was a mere .9% from last year. The South also fared better in terms of sales of new homes, building permits, and new residential construction. The article claims this is due to population growth and the fact that housing in the previous 5 years hasn't been as hot in the South as in other regions. I would say population growth is playing a large part in this, but the underlying question you have to ask yourself is; Why is the population growing? The answer is multi-faceted. For one, the Southern economy is booming. It has been overlooked and undervalued for decades and is finally beginning to implement the infrastructure to be efficient and worthy of business investment. Second, as the political landscape moves more to the conservative side, people are going to want to be around people with like beliefs and values. More importantly, conservatism is good for business. For conservatives, there are few better places than the South. Local leaders tend to be conservative (even if they call themselves Democrats) and conservative leaders, of course, are usually good for business. For instance, the only three states in the Union without a state income tax are Texas, Florida, and Tennessee. They are reaping the economic benefits of greater business investment due to low tax rates. Consequently, Texas and Florida have the two fastest growing state economies in the country and Tennessee is quickly moving up to join them. The South also possesses cheaper labor than the rest of the country due to lack of formal education in much of the current labor force. Employers will only be able to enjoy this for a limited time because the greater economic activity will trickle-down and education will improve shrinking the current education and wealth gaps. The bottom line here is that the Southern economy is going through a multi-year, possibly even decade or more, boom. Investment in the area will pay off sooner rather than later.
posted by BleedRzrbkRed at Thursday, August 24, 2006
3 Comments:
Do you have any kind of meaningful background in economics?
What is the reason for your question?
The reason I asked is because your blog has more of an idealogical feel to it than an economic view. This is why "The Capital Spectator" used the verb "gush" when describing your cheerleading for Laffer's editorial.
You just don't seem to be a very critical consumer of information and you don't seem to feel compelled to offer evidence for your assertions. If you take a look at other econ blogs, you'll see this is somewhat unusual for someone with an economics background.
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