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In our opinion: Economic recovery will not occur without a recovery in housing

Published: Monday, Oct. 1 2012 12:00 a.m. MDT

In this Tuesday, Aug. 21, 2012, photo, a new home is under construction in Palo Alto, Calif.,

Paul Sakuma, Associated Press

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Several recent economic reports are pointing in a positive direction, and the impacts are being felt close to home.

Home — in a general sense — because the data show continued improvement in the Utah economy compared to the rest of the nation. In a literal sense, because the reports specifically deal with home ownership, price, sales and new construction.

Among the headlines: In Salt Lake County, home sales are up nearly 20 percent through the first seven months of 2012, compared to the same period last year. The value of the average home is up 9 percent for the year, while the number of homes in foreclosure is down 15 percent as of August. The rate of new housing construction has climbed for five consecutive months, influencing another recent survey that shows an increasing level of confidence among home builders.

This is important news on a number of fronts. It was the implosion of a housing bubble that triggered — or certainly exacerbated — the 2008 recession, and many economists believe a recovery in housing will be the principal indicator of how quickly and vigorously a recovery will ensue. Because Utah has been in a general population boom in the past three decades, resurgence in the real estate sector has an over-weighted impact on the health of our general economy.

Approximately one out of every six jobs in Utah is embedded in the construction and real estate trades. And that doesn't include a large number of other jobs that are impacted by the housing market — including plumbing and electrical trades — and the profession of architecture, which itself reported a recent upswing in billings for new housing work on a national level.

Simply put, an economic recovery will not occur without a recovery in housing, either as a result of an upswing or as the engine that drives it. The greatest impact will be in the area of consumer confidence, which is boosted when people feel more comfortable in the security of their property or in their ability to acquire a home.

The reports culled from economic data are reflected in what we see as we travel through our neighborhoods, where more "For Sale" signs offer anecdotal proof of increasing commerce, to which many real estate professionals attest in other surveys.

There is and should be a healthy political debate on whether a nascent recovery is in fact afoot, and whether any rebound is hastened or retarded by actions taken or not taken in the public sector.

In the long view, economies tend to travel on an upward or downward slope. Rarely are we blessed by long periods of stability, and the prospect of continuing volatility is certainly not vanquished.

But as we head into the winter months, any evidence of a new spring in the housing economy is heartening evidence that when it comes to the long race out of a recession, we may be in the homestretch.

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