News Announcements
Announcements
April 2, 2009
Porter White & Company has released its 4th Quarter 2008 Birmingham Area Economic Report which can be found on our website at www.pwco.com. Our report discusses the following main topics summarized briefly below.
Home Prices Fall Back to Earth
Much has been said in the past year about the effect of the troubled housing market on the national and local economy. During the run up earlier this decade, our nation witnessed unprecedented double-digit growth in home building, home buying and home prices. One didn't have to be a Wall Street wizard to realize what goes up would come down, particularly when housing prices were rising faster than incomes.
The relationship of home price to income, as measured by median home price to median household income, has averaged around 3.0-to-1.0 in the U.S. since 1980. Between 2000 and 2006, the ratio jumped to a 26-year high of 4.6. While we do not have data going back to 1980 for the Birmingham market, the data we have since 1999 show a similar (but not as pronounced) trend. (read more...)
The Local Economy
The local economy continues to suffer. PWCO's Birmingham Area Economic Index is declining. Most of the indicators used to compile the Index have declined in recent quarters, and those that haven't declined in current dollars, have been dragged down by higher inflation over the past 12 months (as indicated by several GDP price deflators used to adjust the data). (read more...)
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