How housing plays out

I have argued that housing will be a big issue in 2008.  Matt Stoller of Open Left has a great example of one way that this is playing out in a Maryland Democratic primary. The Washington Post has a story about how the housing crisis is impacting the Fort Myers community. Some of the facts:

Across this city, even businesses that have little to do with real estate are reeling. Unemployment is up, sales are down and redevelopment ambitions have been scaled back….

"We are in a real estate recession," said Laurance Baer, manager of the Fort Myers-based Baer’s Furniture chain, where sales are plummeting. "And we have an economy that’s much more tied to real estate than anyone realized." …

The region added jobs at a 9.2 percent pace in 2004, and the jobless rate fell to 2.5 percent. …

The job market followed. The unemployment rate was up to 4.7 percent in July. But the real picture may be worse than the numbers indicate, says Michael Reitmann of the Building Industry Association. The jobless rate does not account for the workers, many of them immigrants who have simply moved away as the economy has softened.

I do not believe that this is a map for the future of the country, simply because Fort Myers is one of the municipal areas most severely hit by the housing crisis. However, Las Vegas, Denver, Miami, Phoenix, Jacksonville, Columbus, and Tampa are cities that have been. If those areas go through this kind of economic pressure, it is going to be very hard. And those are all in swing states or swing regions.