Ripples in the Economic Pool: Housing

Dr. Michael Toma, the director of Armstrong Atlantic State's Center for Regional Analysis, says the local economy remains strong despite a slowdown in home sales.
Dr. Michael Toma, the director of Armstrong Atlantic State's Center for Regional Analysis, says the local economy remains strong despite a slowdown in home sales.
With sales of new homes slowing, some construction sites have gone quiet in recent months.
With sales of new homes slowing, some construction sites have gone quiet in recent months.
Day laborers who gather at Franklin Square seeking work say jobs have been harder to come by since the slow down in the real estate market.
Day laborers who gather at Franklin Square seeking work say jobs have been harder to come by since the slow down in the real estate market.

SAVANNAH, GA (WTOC) - As perhaps the leading analyst on the local economy, Dr. Michael Toma is careful to point out that, even in this slowed housing market, the sky is not falling.

But there are those affected by the cycles of real estate, just as much as realtors and people trying to sell homes, for whom it has to feel a lot closer these days.

"You have all the tradesmen, the builders, the people who are framing and building homes, there's a sharp drop out there,'' says Ray Gaster, whose Gaster Lumber is one of the largest suppliers of construction materials in the Savannah area. "We're seeing fewer and fewer people working on job sites, so a lot of those people have had to go out and find other employment.''

And that has been harder to find with construction of new homes slowing in recent months.

While none of the roughly 20 day laborers looking to be hired at Franklin Square Thursday morning were willing to talk on the record, they all said they are getting less work lately. And that several days can go by before they go out on jobs now.

"There might be an underlying effect in number of hours worked for those individuals,'' said Toma, the director of Armstrong Atlantic State's Center for Regional Analysis. "So there are spill-over effects into other places.''

"We've had even in the supplier business, such as ourselves, we're down in employees probably 20 percent from where we were a year ago'' added Gaster.

With home listings suddenly rising more rapidly than completed sales and requests for building permits on new homes off nearly 40 percent from less than two years ago, Gaster estimates his lumber and supply sales will be down for a second straight year.

According to Toma, any such slow down in the housing market can eventually carry over to home-related retailers as well.

"It can go in a lot of different directions,'' says Toma. "Think in terms of furniture, in terms of durable goods, incidentals that you typically would just buy, you know throw the mop away, the broom, get a new vacuum."

"All the typical bitty stuff that, when you add it all up it is a pretty significant piece,'' Toma added.

With significant pieces being felt in a number of areas.