A residential recovery would be welcome news
The residential construction industry has long constituted an important component of the Mesa County economy. Consider that the construction of 100 single-family homes creates an average of more than 300 jobs. So it was significant when the home building industry surged in the boom days and suffered in the bust that followed.
Now there are some encouraging signs the market for new homes finally could be improving. Substantial recovery still could be slow in coming, but any prospects for gains are far more welcome than the alternative.
According to a monthly index compiled by the National Association of Home Builders, Mesa County was among 28 metropolitan areas that in June joined a list of 80 U.S. housing markets showing improvement. The NAHB/First American Improving Markets Index identifies areas that have shown improvement from recent lows in housing permits, employment and home prices for at least six consecutive months.
Separate measures confirm recent gains in those criteria:
A total of 48 building permits for single-family homes were issued for all areas of Mesa County in May, an 84.6 percent increase over the same month last year. The latest gain brings the total number of permits issued during the first five months of 2012 to 165, a 36.4 percent increase over the same span last year.
The monthly unemployment rate in Mesa County edged down a tenth of a point to 9 percent in May. With declines in three out of the last four months, the jobless rate has dropped to its lowest level since December. At this time last year, the rate stood at 9.6 percent. Over the past year, payrolls have increased 1,906, the ranks of the unemployed have dropped 330 and the overall work force has grown 1,576.
Median sales prices for homes have trended upward in recent months.
The median sales price of $172,100 for April was up 6 percent from March.
While these numbers represent improvement on a year-over-year basis, they remain far below the levels experienced before the full effects of the recession were felt in 2009.
To keep things in perspective, remember that more than 1,400 single-family building permits were issued in Mesa County in both 2005 and 2006. Remember that monthly unemployment rates in the county were routinely half to a third what they are now. Remember, too, that median home prices used to top $225,000.
To be fair, the rapid boom that occurred in Mesa County just before the bust was obviously unsustainable and came with considerable growth pains. Moderate growth would not only be more realistic, but also preferable.
Clearly, the Mesa County economy has a ways yet to go to achieve recovery. Yet, the trends pointing in that direction — in particular increasing sales tax collections and real estate sales — are unmistakable.
Moreover, the foundation of the economy remains firmly intact with regional retail shopping and health care as well as a growing university. That’s not to mention the important contributions of the tourism and agriculture industries.
If the new home market in Mesa County is, indeed, improving, then gains in another crucial component of the economy will strengthen and help hasten recovery. Here’s hoping that’s the case.