Even the local media are admitting that Phoenix is back in a housing slump. I mean no disrespect to hard-working Arizona journalists. But let's face it, the Real Estate Industrial Complex controls the conversation, withholds or doles out ad dollars and can, ahem, ensure that offending columnists are run off. So when the local media admit to a problem involving this sacred cow, head for the bomb shelter.
More about housing (yawn) later. The most arresting data come from a new report by the federal Bureau of Economic Analysis. Arizona's per-capita personal expenditures, adjusted for inflation, were virtually flat in 2012 compared to 2000.
And this is "consumer spending" kept afloat with massive debt considering that most wages have been stagnant or falling, and the typical American household saw a 36-percent decline in its wealth between 2003 and 2013.
Other mid-year observations:
Fewer people are working than before the Great Recession, and the available labor force has fallen...
...Unemployment is higher than in states with similar population...
...Unemployment in metro Phoenix, the state's strongest region, is high but could be worse. As the chart shows, it is higher than comparably sized metros with diverse, quality economies. It is lower than Detroit and California's Inland Empire (another real-estate play)...
...Per-capita personal income growth is falling again in metro Phoenix...
..Average earnings growth for metro Phoenix private-sector workers is falling, too, and not keeping up with inflation...
...On a dollar basis, the problem is even more striking when compared with peer metro areas...
...The difference is that these other metros, against which Phoenix is competing for talent and capital whether it wishes to or not, have high quality economies. Phoenix has a real-estate development economy. And it remains deeply wounded from the crash...
...The new slump is no surprise. Americans are moving less and heavily burdened by debt. The state's population growth is a shadow of its former strength. The "back to the city" movement is benefiting real cities, not suburbs. Private equity snapped up ghost subdivisions and cashed out, leaving continued high inventory and rental slums because demand is so low. As I wrote years ago, the old Arizona sprawl model — with championship golf! — is not coming back.
Because real estate is the economic driver, rather than the consequence of a real economy, Phoenix can't even keep up with such sprawly cities as Houston, Dallas and Oklahoma City. To the extent that people are "priced out" of the coasts and choosing inland cities, they are picking those with more than real-estate hustles.
And still, still, the local-yokel Powers That Be don't have a Plan B.
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You can download the new BEA report on personal consumption spending here. But you'll need to use this inflation calculator to get real, inflation-adjusted dollars.
Most of the charts look like cal's EKG when a waitress walks by the table.
Posted by: Ruben | August 07, 2014 at 03:28 PM
On a sad side note I'm trying to help a couple of young real estate agents find jobs in the insurance industry. They've each only sold one house (to a family member) in the last year. Ouch.
Posted by: Ruben | August 07, 2014 at 03:37 PM
Holy crap, Reb, I lost my shit on that one.
Posted by: Petro | August 07, 2014 at 06:58 PM
Petro, If Ruben didnt smoke so much weed he might be able to tell the difference between a waiter and a waitress.
Whens the next meet?
Maybe Ruben will bring a few of those Showlow crafted hollowed out pine cones.
Jon, thanks for all the charts and stats but all you have to do is drive around the "Sinking Valley of the Sun" to know there is a huge hole and the housing market is on its way to China. And the commercial building stuff also.
Posted by: cal Lash | August 07, 2014 at 10:00 PM
http://blogs.wsj.com/economics/2014/08/07/foreclosure-starts-hit-pre-crisis-low/
Posted by: cal Lash | August 07, 2014 at 10:30 PM
Cal,
Here's a pretty good take on Putin and Russia:
http://www.foreignpolicy.com/articles/2014/08/05/tsar_vladimir_putin_russia_world_war_i_bosporus_crimea
Posted by: Rogue Columnist | August 07, 2014 at 10:34 PM
Jon thanks for the article.
Out of interest in 58 I sat in on a course titled Intellectual History of Russia
I learned that the DNA of Russia was one of paranoia primarily due to the fact the country is virtually land locked.
"Access to year-round, ice-free sea lanes has always been a strategic priority for Moscow. For centuries, the Turkish Straits were essentially the Russian economy's umbilical cord."
I agree behind Putin are the economic drivers that want to insure their access to the markets and for military logistic reasons.
However as tough as Putin may be I think he has a soft spot for "Mother Russia".
Posted by: cal Lash | August 07, 2014 at 11:05 PM
The sprawl cities in Texas and OK enjoy oil & gas royalties to cushion them from the Tea Party form of non -governance. Oil & gas remains a secular bull market providing economic growth not 100% related to human talent.
The governorship in Arizona will soon be decided in the Republican primary. Reversing Medicaid expansion will certainly be high on the agenda for this race to the bottom. Without any industries providing significant organic growth in Arizona, and real estate growth derivative of other industries' growth, the Kooks running Arizona will have the opportunity to run the state further
into the ground.
When a state is governed with out -of -state values and national hot political money Arizona is what you get.
,
Posted by: uno | August 08, 2014 at 05:37 AM
Mr. Talton,
I just wanted to thank you for your work. It is much appreciated. I am a 14 year resident of Phoenix. It's beyond refreshing to read your opinions of this crazy city.
My wife and I are shopping for a new house right now. One of the places we were considering was built by John F. Long. I wanted to find out who this guy was, and stumbled upon your post regarding his death. Your blog is now bookmarked, and I check it every few days. It's invaluable.
The first few years I lived here, Janet Napolitano was governor. I used to love the fact that she would show up on the 103.9FM morning show every month or so to answer questions. Obama stole her away, and now the idea of a Democratic governor seems almost impossible. I watched the Republican gubernatorial debate on KAET, and it dawned on me that the liberal minded could, ironically, be looking back on the Jan Brewer days with fondness in a few years. It seems that Scott Smith might be our best hope. I just hope that the Republican primary voters have at least the good sense to pass on Ducey, Jones or any of the others. I'm not holding my breath though.
I work at Maricopa Medical Center. If one of these folks gets elected, and actually rolls back the Medicaid expansion, I don't see how our hospital survives.
Anyway, thanks again for your work. I learn a lot from your posts.
Posted by: Louis Richardson | August 08, 2014 at 10:18 AM
Jon, here is a pretty good take on Putin and Bush as international players and their fear of Democracy.
http://www.huffingtonpost.com/vladislav-inozemtsev/putin-scares-democracy_b_5660025.html
Louis, I suggest you search for a home not in Arizona unless you relish watching Arizona become a kook outhouse with corn cobs as wipes.
Welcome to the confederacy's most western state, ruled by religious jihadists and assisted by fascists.
Posted by: cal Lash | August 08, 2014 at 11:04 AM
Thank you, Mr. Richardson!
Posted by: Rogue Columnist | August 08, 2014 at 12:11 PM
From Justice No Peace:
Emil, I recall Viv Morrow as I do Lee Marvin and the Dirty Dozen. Now we have Brad Pitt and the Inglorious Bastards.
I find little sanity in "War". particularly statements like
"Rules of War and Spoils of War."
From the Preservation Police:
It was Bartoli Cleaners, and just to the east a few yards was the old Sunnyslope swimming pool. Bartoli's and other cleaning establishments have been bought up by the Patel community as are a number of motels. My favorite is in Florence, clean and the aroma of the food from the office kitchen is superb.
Posted by: cal Lash | August 08, 2014 at 12:27 PM
Mark your calender for Chapo coming to the old preserved Valley Art theater in Tempe on 22 August at 4:30 PM.
Posted by: cal Lash | August 08, 2014 at 12:36 PM
Chapo? Chapo Guzmen.
Why is Chapo a feature at the Valley Art Theater? I don’t know, except that there is controversy over his arrest.
Why is that? Because, it is thought that he was a US informant.
In fact, all evidence of the existence of such a network of covert assets, especially if it was operating illegally, skirting US and Mexican law, would likely have to be destroyed or otherwise covered up — particularly if it was discovered by competing agencies or honest law enforcers and prosecutors — to assure the sponsoring US government agencies and officials are not exposed themselves.
If such a purge were being carried out by the US intelligence officials, along with the Mexican government (albeit for differing reasons), it would leave the Sinaloa organization’s existing leadership in a very vulnerable position. In that scenario, not only would they lose control of their collapsing network of corrupt public- and private-sector officials within Mexico, but also any external support and protection from US intelligence agencies as well.
http://narcosphere.narconews.com/notebook/bill-conroy/2014/04/zambada-niebla-s-plea-deal-chapo-guzman-s-capture-may-be-key-unfolding-
Jon, it seems that most states are struggling. People still have large debt obligations. I am seeing a few new infill subdivisions going up in my area. It is as if developers are more optimistic than your charts would suggest they should be. It will be interesting to see how quickly their houses sell.
Posted by: Suzanne | August 08, 2014 at 07:07 PM
Suzanne are you talking east valley? If so there are a lot of folks out there looking for houses in the $500,000 range and up. Just drive up the SW slope of the Superstitions for a look at the Mansions they are building.
Chapo the short version:
http://www.forbes.com/sites/doliaestevez/2014/03/11/new-film-portrays-mexican-drug-lord-el-chapo-guzman-as-a-zorro-like-legend/
Chapo is a Forbes 500 CEO, not an informant. His Mexican Macho Shorty ego would never admit to “informant”. But he is first and foremost a capitalist. His shares marketing with generals, presidents and the CIA. He supplies whatever the public demands. He is much smarter the Manuel Noriega, much a thug. He never got wheeled out of prison in a laundry cart, he walked out as tall as a short man can, with the expressed (paid) permission of the warden. This is a man that had all the luxury of a Hilton Hotel in a Mexican “prison” including extreme use of Viagra for fucking contests. If Al Capone were still alive he might affectionately refer to Chapo, as son!
Currently the deal included that his young wife and child are safely living in California.
The DEA and the CIA are not friends they are competitors. They call the CIA the Big Dogs. DEA still “owes” the CIA for extreme infiltration of DEA and for death of DEA agents.
I suggest you take a look at Mexican history since President Calles. His daughter has produced a PBS special.
Posted by: cal Lash | August 08, 2014 at 09:47 PM
And how is the De Beers Cartel different from the Sinaloa Cartel?
Solomon Vandy
Posted by: cal Lash | August 09, 2014 at 12:15 AM
His daughter has produced a PBS special.
You are going to have to give me more clues. PBS and Calles generally bring up 'El General'.
The fill-in subdivisions I am thinking of are not the 'golf course' variety. They are smallish 40 acre or less divisions. The neighborhoods around the developments are middle-class homes, mostly built in the past 10 years.
Posted by: Suzanne | August 09, 2014 at 11:47 AM
El General is it.
http://www.pbs.org/pov/elgeneral/additional_video2.php#.U-cGlPldU88
Seems many Mexican Generals in the 1900's thought they should be president. Many got assassinated. Calles was a general that did better by working behind the scenes.
and for some fun a Movie of Pancho Villa as himself.
http://www.imdb.com/title/tt0337824/
Posted by: cal Lash | August 09, 2014 at 10:48 PM
A thought on Chapo from a friend.
Guzman was released from prison when PAN took the presidency and returned to prison when they lost the presidency. What does happen in the drug world are purges. When the DEA agent Kiki Camarena torture and murder case blew up everyone connected was either killed, imprisoned or hunted in order to protect the government from any claims of collusion. But the relationship between the state and the drug world continued. Just as when Garcia Abrego went down under president Salinas he was extradited to the US but the relationship between the drug world and the presidency continued.
Posted by: cal Lash | August 09, 2014 at 10:54 PM
I guess since the Chinese have been around longer as a civilization they are smarter?
http://www.nytimes.com/2014/08/09/world/asia/china-looks-to-high-speed-rail-to-expand-reach.html?ref=world&_r=1
Posted by: cal Lash | August 09, 2014 at 11:44 PM
Closing out the day.
Planet Earth Update per e e cummings.
"when God decided to invent
everything he took one
bigger breathe than a circustent
and everything began
when man determined to destroy
himself he picked the was
of shall and finding only why
smashed it into because."
Posted by: cal Lash | August 10, 2014 at 12:16 AM
closing out this blog as Phoenix closed out its opportunity to go through the door to a better existence, I offer Kafka's' "Before The Law."
Posted by: cal Lash | August 10, 2014 at 09:04 AM
In the news: Phoenix Mayor endorses a 30 year light rail program.
Feds still claim they are winning the war on drugs.
Cartel CEO's and Corrupt government officials just smile and wash their profits through American banks that take 30 percent.
http://reason.com/reasontv/2014/08/10/rise-of-the-super-drug-tunnels-californi?utm_hp_ref=mostpopular&utm_source=huffingtonpost.com&utm_medium=referral&utm_campaign=pubexchange_article
US supplies weapons to Arabs, whom may create three Iraq's while continental shelfs split apart and escaping methane gas may kill us all, soon.
Posted by: cal lash | August 11, 2014 at 08:05 PM