Local housing downturn could be much worse

A civic club recently asked me to speak on the topic of the local economy.

I’m not an economist, but I accepted the offer because communicating economic news is a good part of what I do for a living. I speak to economists, analyze economic data and translate it into language that the average person can (I hope) understand.

I also knew accepting the offer would get me a free breakfast and a nifty pen.

Folks seemed to perk up during the “housing crisis” portion of my talk, probably because I used the term “housing crisis” but also because every day there seems to be a national news story about rising foreclosures, weak home sales and declining home construction. Just last week The Associated Press named the housing downturn as its top business story of the year.

Clearly, the Augusta area’s housing market is in a downturn, but a crisis? That might be a little too strong.

Unlike many high-flying real estate markets around the country, the Augusta area simply doesn’t have very far to fall.

The homebuilding and sales frenzy that occurred in our area during the past few years is nothing like the orgy that happened in California, Florida, Arizona and other high-growth areas where real estate speculators helped drive prices to stratospheric levels. That never happened here.

Let’s put things into perspective with a little data. According to U.S. Census Bureau records for single-family housing permits (the bellwether indicator of construction activity), there were 2,148 permits issued in the Augusta-Aiken area through October, the latest data available.

That’s about 20 percent below the 2,701 permits issued in the market during the same period last year, 23 percent below 2005 and 25 percent below 2004. In fact, this year is shaping up to be the worst year in terms of new- home construction since 2001.

But you know what? That’s not so bad. Consider this: The average number of year-to-date permits issued through October during 1995-2000 is 2,104, which is only 44 homes off this year’s figures.

To me, that sounds more like a return to normalcy than a crisis.*

Most officials predict the national housing market has yet to bottom out, so it will be interesting to see what local construction activity looks like next year. If a “crisis” really occurs, don’t blame me.

THEY’RE REFINING EVERYTHING BUT ETHANOL: Xethanol Corp., a partner in the alleged ethanol refinery in east Augusta, issued a news release last week to announce it is “refining its strategy to pursue opportunities in clean technology.”

Here’s a quote from David Ames, the company’s president and CEO:

“We are refining our strategic plan for the company in view of the changing ethanol markets and other economic factors affecting our current business. We have several encouraging research projects underway to develop alternative energy sources.”

In other words: We’re not going to actually do anything – such as, oh, say produce 50 million gallons of ethanol a year at the former Pfizer plant in Augusta that we purchased last year; we’re going to study some things.

I guess settling those seven shareholder lawsuits last month has given the company a little less cash and little more time to think things over.

ADIOS, LOCO’S: I’ll bet my left index finger (you can’t have the right; it’s my trigger finger) that Loco’s Grill and Pub, the casual dining chain that closed last week after two years in operation, will be converted into Augusta’s 213th Mexican restaurant. Mexican is the new Chinese.

It’s unclear why the Athens, Ga.-based chain’s Augusta franchise owners abruptly closed up shop – their Loco’s franchise in Macon is still open – because repeated messages left with the company have not been returned.

Ralph Kitchens, of Nichols Land & Investment Co., is marketing the property and said he has had several people “express an interest” in it , all of whom are restaurateurs.
He wouldn’t tell me whether they were Mexican .

UNVERIFIABLE FACT NO. 13: 8.7 ounces – average weight of a medallion for sale at Augusta Mall jewelry kiosks.

LAST-MINUTE GIFT IDEA: Instead of giving your usual gift of fatty foods, sweet treats, cigars, alcohol, firearms or an 18-karat gold Wu-Tang Clan medallion, consider giving your loved ones something beneficial to their health, such as a gift card from MedExpress Clinics LLC.

The Evans-based fee-for-service retail health clinic recently rolled out the gift-card program as a way for small companies who can’t afford employee health insurance to give their workers at least some type of health benefit. MedExpress also said the cards are a “practical” gift for college students, people on fixed incomes and other people who likely are not members of an employer-sponsored health plan.

“There are gift cards for groceries and gas,” said MedExpress founder Phil McElhaney. “Why not offer cards to cover health care costs, too?”

Cards can be purchased in any amount and used at all MedExpress Clinics and Family Physicians of Evans and Medical Center West Pharmacy.

Learn more at www.medxpressclinic.net.

MEAT IS MURDER: The neat thing about working for a newspaper (I suppose) is the sheer volume of mail I get from different groups and organizations around the world. I’m convinced there is an organization for everything.

Everything.

If you can’t find the Coastal Virginia Gay Nazi Bikers Club chapter, it’s probably because you’re just not looking hard enough.

One of the organizations I routinely receive mail from is the People for the Ethical Treatment of Animals, better known as PETA**. I always open the group’s packages with a certain zeal because, just like a McDonald’s Happy Meal, there’s often a toy inside.

The best freebie, the “Colonel Sanders” bobblehead toy, came a couple of years ago. The Colonel’s familiar white-suit was covered in blood, and in one hand he held a knife; in the other, a dead chicken.

I gave that toy to a colleague as a gift for his vegan girlfriend. I hope she appreciates it because I’m pretty sure it will become a valuable collector’s item. (Hey, Tony, does she still have it?)

PETA’s latest issue du jour is something all you poultry processors out there might be interested in: controlled-atmosphere killing, a kinder, gentler form of chicken slaughtering shortened to CAK.

The standard way of killing birds involves an immobilizing electric shock that is followed by a knife to the throat.

CAK relies on using nonpoisonous gases to put the birds “to sleep” before the slaughter.
Of course, PETA is against the slaughter part, too, but I suppose that’s more of a long-term goal.

* Though I’m sure it feels like one if you make your living building homes, selling homes and approving loans for homes.

** Which, incidentally, is based in coastal Virginia.