Outlook: HBA: Solid economy here will buoy home building

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When I was a teen-ager, with the cast iron stomach of the young, I loved to ride the roller coaster. I thrilled at the slow, steep climb to the top, and I held my breath as the coaster seemed to pause at the summit before taking its plunge back toward the ground at hair-raising speed. |ret||ret||tab|

Up and down it would go, each hill more exhilarating than the last. |ret||ret||tab|

What makes for an exciting amusement park ride, however, isn't what most of us would prefer in our chosen profession. I've experienced the ups and downs of home building in more volatile markets, and I can assure you that we have it mighty good here in the Springfield area.|ret||ret||tab|

My first six years as a home builder brought many wild rides, and not of the fun variety. I had just left my military career to join a successful home-building company made up of other former Army officers. |ret||ret||tab|

My first position with this company was as project manager in Tulsa, Okla., in the early 1980s. |ret||ret||tab|

Oklahoma's economy, at that time, was based heavily in the oil industry. The economy was booming and so were housing starts. |ret||ret||tab|

Within a year and a half, however, the oil boom busted, and the economy there went south.|ret||ret||tab|

I headed south, as well, to my new position (with the same company), as area manager in Albuquerque, N.M. |ret||ret||tab|

Albuquerque had a diverse economy, a rapidly growing population, and a good-sized housing shortage.|ret||ret||tab|

By 1987, almost every home building company in nearby states with oil-based economies (mainly Oklahoma, Texas and Colorado), had relocated to Albuquerque to get their piece of the pie. |ret||ret||tab|

For about two years, many builders prospered. |ret||ret||tab|

But soon the 2,000-housing-unit shortage became a 1,000-unit surplus. In addition, the bureaucracy in the local government was completely out of control. It wasn't uncommon to wait in long lines to apply for permits, then wait two weeks to receive that permit. |ret||ret||tab|

If a builder wanted to make even a simple change to his house, another long waiting period was necessary in order to amend the permit.|ret||ret||tab|

My wife and I decided not to take the next wild ride that was starting in the Tampa Bay area. |ret||ret||tab|

We'd had enough excitement. |ret||ret||tab|

Instead, we chose to come home to the Springfield area. This would prove to be one of the smarter decisions we've ever made. |ret||ret||tab|

Springfield, with its sense of community, diverse economy, and steady growth, has become an ideal location for a strong and healthy housing market.|ret||ret||tab|

Economic forecasters predict that 2001 will experience a moderate slowdown and that the national economy is heading for a soft landing during the next 12-24 months. |ret||ret||tab|

We know that the country's economic fundamentals are strong, and that our local government continually works with area business leaders to provide incentives for economic growth. |ret||ret||tab|

The Home Builders Association of Greater Springfield successfully interacts with local government agencies to maintain quality of construction and safe working conditions, but without symbolic legislation that only serves to increase building costs.|ret||ret||tab|

The National Association of Home Builders forecast a drop of 3.9 percent in single-family home starts. |ret||ret||tab|

That translates to 1.21 million starts, down from 1.26 million starts in 2000, nationwide. |ret||ret||tab|

This slight drop in demand has likely benefits: it should ease the labor shortage, taking pressure off wages, and it will continue to moderate prices of building products. |ret||ret||tab|

Even better, interest rates seem sure to go down. St. Louis-based Macroeconomics Advisors puts 2001 housing starts at 1.5 million. |ret||ret||tab|

The firm's chairman, Joel Prakken, PhD, believes low mortgage rates in the coming year will provide continuing support to the housing sector.|ret||ret||tab|

The regional starts show the Midwest is up 6.7 percent for the month of October. |ret||ret||tab|

The Western states, however, experienced a drop of 15.9 percent during that same month, making that area one of the "pockets" of slower economic growth in the nation. |ret||ret||tab|

These areas may be in for the wild ride I referred to earlier, but the economy in southwest Missouri will be about as exciting as the pony ride at the Ozark Empire Fair.|ret||ret||tab|

|bold_on|(Ed Alden is president of the Home Builders Association of Greater Springfield.)|bold_on||ret||ret||tab|

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