how durham fared in the recent housing crisis and the road to recovery
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How Durham Fared in the recent housing crisis and the road to recovery. By Daniel Kindya December 9, 2010 Urban Economics. Introduction. In mid 2000’s, housing prices had hit all-time high. Subprime-mortgage rates and increased demand for housing led to housing boom. - PowerPoint PPT PresentationTRANSCRIPT
HOW DURHAM FARED IN THE RECENT HOUSING CRISIS AND THE ROAD TO RECOVERY.By Daniel KindyaDecember 9, 2010Urban Economics
INTRODUCTION In mid 2000’s, housing prices had hit all-time high. Subprime-mortgage rates and increased demand
for housing led to housing boom. Many new homeowners were unable to pay
mortgages. Caused foreclosures. Hardest hit areas include California, Arizona, New
England. How did Durham fare?
Photo Courtesy of epa.gov/kidshometour/tour.htm
ANNUAL NEW PRIVATELY-OWNED RESIDENTIAL BUILDING PERMITS
A measurement of growth
DURHAM BUILDING PERMITSYear Permits Avg Cost
1996 997 111,800
1997 1274 123,500
1998 1519 120,500
1999 1554 148,100
2000 1283 152,600
2001 1633 156,300
2002 1590 159,700
2003 1834 163,500
2004 1937 164,100
2005 2176 165,800
2006 2002 176,400
2007 1574 182,600
2008 1082 187,200
2009 739 189,100
Expansion then decline.
Reasons and Foreclosures
Price trend New home value
increasing, old home value decreasing
First time homeowners more affected
Wealthier Durhamites less affected
Data Courtesy of city-data.com and US Census Bureau
FOR COMPARISON: KENT COUNTY, DELAWARE BUILDING PERMITSYear Permits
1996 622
1997 629
1998 676
1999 720
2000 854
2001 958
2002 1,447
2003 1,776
2004 2,042
2005 1,970
2006 1,501
2007 1,332
2008 828
2009 732
Why Kent County? A typical US county hit a typical amount by housing crisis.
Similar trends in beginning.
Larger spike than Durham (2000-2004: Durham 151%, Kent 239%)
Similar bust to Durham (2004-2009: Durham 38.2%, Kent 35.8%)
Data Courtesy of US Census Bureau
FOR COMPARISON: MARICOPA COUNTY (TEMPE, ARIZONA) BUILDING PERMITSYear Permits
1996 29,3871997 31,7281998 35,1491999 36,3472000 33,1582001 34,6692002 36,3122003 41,3882004 48,2282005 43,3972006 28,7022007 21,0942008 9,9922009 6,b451
Tempe, Arizona was one of hardest hit areas during housing bust.
Similar trends in beginning.
Smaller percentage spike than Durham (2000-2004: Durham 151%, Tempe 145%)
Much larger bust than Durham (2004-2009: Durham 38.2%, Tempe 13.4%)
Data Courtesy of Us Census Bureau
HOUSING UNITS VS. POPULATION
A measurement of availability
HOUSING UNITSYear ~Housing
Units 1970 33,0001975 36,0001980 39,0001985 48,0001990 58,0001995 70,0002000 80,0002005 95,000
Trend of increasing. Large increases
starting in late 80s until today due to growth of fringe Durham and decline in central city Durham.
Data Courtesy of city-data.com
POPULATIONYear ~Population1970 95,0001975 100,0001980 105,0001985 120,0001990 140,0001995 160,0002000 190,0002005 205,000
Trend of growth. Starts increasing
more in mid 80s due to improvements in Durham and continues today.
Data Courtesy of city-data.comPhoto Courtesy of pulse.pospsmart,dk
RATIOYear People /
Housing Unit
1970 2.881975 2.781980 2.691985 2.501990 2.411995 2.292000 2.382005 2.16
High ratio in 70s and 80s due to overcrowded central Durham neighborhoods.
Outer Durham growth in 90s reduced ratio.
Ratio grows a bit in 2000, finding equilibrium.
Housing boom in 2005 causes largest 5 year decrease in ratio.
2010 numbers unavailable, but due to foreclosures overwhelmingly likely a higher ratio.
HOME LOANS GIVEN BY DURHAM BANKS
A measurement of demand
LOANS VS. POPULATION TRENDSYear Loans % Change in
PopulationLoans / Change in Population
2000 2,123 2.28% 931.12001 2,285 2.39% 956.12002 2,134 2.11% 1011.42003 2,693 1.15% 2341.72004 3,047 1.60% 1904.42005 3,881 1.85% 2097.82006 4,038 2.42% 1668.62007 3,364 2.92% 1152.1
Data Courtesy of city-data.com
LOANS VS. POPULATION TRENDS Why Loans vs. % Change in Population?
Represents new homeowners Shows not all increase in loans due to new
residents. Sharp increase starting in 2003, start of
housing boom. Peaks and falls in 2007 due to housing bust. Numbers unavailable for past few years, but
overwhelmingly likely Loans / Change in population value still low.
CONCLUSION New homes built, Durham was hit an average
amount. Not lightly, not as hard as other areas.
Overexpansion in the housing market caused a decrease in the Population / housing unit ratio. Foreclosures are driving the ratio back upwards.
Loans vs. % Change in Population shows that the expansion in the housing market during the boom was not just all new residents, but also first time Durham homeowners.
QUESTIONS? COMMENTS? Thank you for listening. At this point I will be willing to answer any
questions or comments you may have.
Sources “Durham, North Carolina.” City-Data. Advameg
Inc, 2010. Web. 2 Nov 2010. <http://www.city-data.com/city/Durham-North-Carolina.html>.
“Building Permits.” Censtats Database. US Census Bureau, 2010. Web. 2 Nov 2010. <http://censtats.census.gov/bldg/bldgprmt.shtml>.