When I wrote this article for last year's edition, I urged a sense of "cautious optimism" -- and as I look back on what 2009 brought and our expectations for 2010, I am pleasantly surprised.
Actually, I am more than pleasantly surprised. I am more excited and optimistic than I have been about the housing industry in awhile. Of course, that can all change in a moment's notice, which is what happened in 2009.
The housing industry peaked in 2004, and we saw steady declines after that. Last year started out looking the same. In fact, by June 30 housing starts were down by 28 percent from 2008.
But thanks to several factors, including the first-time home buyers tax credit and a hefty amount of stimulus money in our region, we ended the year on a good note, with a 6.7 percent overall increase in housing starts.
When you add that to the amount we were down in June, the last six months of the year actually showed an increase of nearly 35 percent! We have experienced our first increase in housing starts in five years, and I think that bodes well for 2010.
A strong finish to 2009, coupled with the extension of the first-time home buyer credit and its expansion to move up/repeat buyers and interest rates that are still near record lows, leaves me confident that 2010 will again be a successful year for the building industry and success in the building industry certainly translates to an economic recovery in the entire region.
In fact, a study conducted early last year at our request by the National Association of Home Builders Housing Policy Department illustrated the economic impacts of the home building industry in our region. The study showed that not only does housing more than pay for itself in revenue generated, but it's also an important industry in our regional economic health. For every 1,000 single-family homes that are built locally (last year there were 1,238), 1,744 jobs are created and $14 million in local taxes are generated -- and that is not counting the ripple effect this has on the economy year after year.
In fact, if you look at the industry of homebuilding compared to other employers, we are the sixth largest employer in the region. These numbers make it very clear that the success of the homebuilding industry in the Tri-Cities has an impact on our overall economic health.
What this all means is that because the housing market is looking up, I believe the Tri-Cities region will continue leading the nation when it comes to economic recovery. And of course, there are things that can be done to help ensure that stays true. First is to foster a business-friendly community and state. We all benefit from economic development and job creation, and we need to continue to support these efforts.
We also need to be careful about inflating home prices through new fees and requirements. Every year the Legislature and local governments want to impose new requirements on the home building industry. More requirements almost always mean high prices, and higher prices mean more people are priced out of the market.
I caution against the influx of fees and regulations that may seem like a good idea. Their economic impact can have devastating and lasting effects on the building industry, and that will affect each and every one of us.
The Home Builders Association and our members have been no stranger to the ups and downs of our economy, but I think we have finally seen the bottom of the most recent downturn.
While I don't anticipate anything like 2004, I am confident we are well on our way to a more prosperous and successful 2010.