Sunbelt states that bore the brunt of the housing collapse are making a comeback based in part on the very sector that sent them into free fall.
Housing starts, housing prices and foreclosures are all interwoven with jobs, and a Stateline analysis shows California and Arizona adding jobs at a higher rate than the rest of the country while Florida and Nevada are on the mend too.
“Housing has an oversized impact on the economy,” said Sujit CanagaRetna, senior fiscal analyst of the Council of State Governments. “There are all kinds of ripple effects generated by the housing sector. Whether it’s the makers of kitchen cabinets and flooring to architects and construction workers ... housing affects every sector of the economy.”
Here’s how much: For every single-family house built, more than three full-time jobs are created. Half of those jobs are in construction and the other half are related to products that go into a home, such as lumber, concrete, lighting fixtures and heating equipment, according to the National Association of Home Builders.
The impact goes far beyond construction. There are real estate agents and brokers who provide services to home builders and home buyers, as well as lawyers who get involved with closings and foreclosures. Tax-wise, state and local governments will collect an estimated $90,000 in taxes for every single-family house built.
This June will mark four years since the official end of the 2007-2009 recession, which was brought on largely by the bursting of the housing bubble and a credit crisis. The economic downturn depressed home buying, and when people weren’t buying houses, they weren’t purchasing big-ticket items like refrigerators and carpets and other home supplies, affecting demand and thus jobs.
Just last year, California, which has the world’s ninth largest economy, was looking at a double-digit unemployment rate, multibillion-dollar deficits and the dubious ranking of first in the nation in foreclosures. But in the course of 2012, California added jobs at a rate faster than the rest of the country, including posting more new construction jobs than any state besides Texas. The state’s budget is essentially balanced for the first time in years, thanks to rising revenues from increased economic activity and Democratic Gov. Jerry Brown’s tax increase, which voters approved last fall.