The latest construction figures for Houston ( supposedly) a good market is down 53% compared to 2008. This is both a statement about over building. It also indicates how tied our economy became to housing and construction. It used to be that good jobs and schools attracted people to live in a area.
This model would generate positive development of a area if those two criteria were prevalent. However in Houston, it was like someone was playing the motto from “Bull Durham”- If you build it, they will come.
Neighborhoods sprouted up while lending was easy. People would move further and further away from downtown. After enough of a mass had developed, large strip malls and shopping centers appeared to support these fledgling communities. Eventually, the area had enough of a nucleus to support the development of entertainment areas (Sugar Land Town Center, Woodlands, Kemah), and this areas helped reduce the need for people to leaves these booming enclaves.
Somewhere along the way, the logic was twisted. Jobs or great schools were not driving the migration, but it was simply the access to cheaper homes. In my opinion, the fundamentals of sustainable communities were now being driven by the migration versus business development. Our growth was built on building more homes and all the associated industries related to this field (lending, furniture, trades people,etc).
This is why our recovery seems have a circular analysis, as the job market was being driven by this consumerism. We must pump the consumer to spend more money on goods that they may or may not need. However, it is that spending that lead to the debt that they cannot afford. This mindset spurred the real estate binge, as it was simply the new easy to get item. Homes replaced the Home Shopping Network for easy to find deals.
The development of new industries or innovations has not been driving the growth of this country since our dot.com bust in early part of the decade. Instead our growth was simply driven by our want for new stuff, and a fundamental denial that we would have to pay it off. If we had developed new medicines, technologies, industries; then maybe the growth would be more sustainable. This must be what analyst refer to when they say “good job” growth.
Tonight, I may watch Field of Dreams to see how we can find a clue to get out of this mess. I think it had a happy ending.
Posted by ashokalion 
