Cold Enough For You?
Anyone with a Twitter feed knows that this year a lot of correlations are being made with the weather. The bottom panel of the mashup shows the latest housing start data in the midwestern U.S. The chart came via Joe Weisenthal at the Business Insider with the question "Think the weather isn't having a major effect on the economy?"
Well yes the weather does "effect ... the economy"; snow tires are doing a booming trade but the chart is housing starts in the midwest and I noticed by looking at a 24 year chart (top panel inset) of U.S. mortgage applications that since the Pit of Gloom in 2009, mortgage demand has dropped even more across the U.S. into a 5 year well defined narrow range similar to but more extended than the mid 1990's.
Yes it's cold out there but as I have highlighted on the lower panel midwest chart, the winter of 2012 saw a spike in starts as dramatic as the current slump and according to a USA Today news item in December 2012 "...parts of 17 states are (were) under winter weather advisories as far west as Washington state and as far east as Maine." At the time of the news, 7 people had already died from weather related events, thousands of flights had been cancelled and tens of thousands were without power. Housing starts peaked that winter.
Multi-unit buildings count each unit as a start and if current weather delays the footings being poured then potential multiple units don't make the "start" count. For the last 5 years, midwest starts have been trending up to a peak in 2012 regardless of weather and this year starts have plunged. It could be a drop in demand for the midwest as a correlation with the rest of the U.S.
In real estate, location and employment opportunities can trump weather.
History, Charts & Curated Readings
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'