Pulte pullout probably signals hard times ahead for Kansas City!!!
It's no secret that Kansas City is in a lot of debt. Sadly, the grand schemes of oh-so-smart urban planners and corporate cheerleaders are about to come crashing down as this town is now at the beginning of a nationwide (worldwide) financial meltdown.
Think I'm being dramatic? Not really considering that the pullout of the No. 3 homebuilder in the metro area provides a clear indication of hard economic times in Kansas City.
Pulte Homes has property in Lenexa, Kansas City North, Liberty and Lee's Summit.The bad news doesn't stop there . . . It's worth noting that Kansas City is right in the middle of RV country. Well, it turns out that the "RV Indicator" is one of the most accurate signs of impending recession and, not so surprisingly, RV Sales have incurred a record slump.
While Pulte Homes maintains its No. 3 ranking in building permits in the metro area, the company's financial statement shows that new orders are down 37 percent from the third quarter of last year.
For the past three decades, deliveries of motor homes and travel trailers have dropped before each decline in the U.S. economy, giving the $15 billion industry a reputation as a bellwether. As the U.S. housing slump worsens, gasoline prices rise and consumer confidence wanes, RV sales are forecast to slide this year and next.So the writing is on the wall and this spells disaster for hopes of the silly downtown renaissance pipe dream. Why? Because the entire project is based on good financial times and white people spending a lot of money on luxury items.
So far, the affluent people of Johnson County don't mind dropping top dollar to hear a talentless tween artist sing meaningless songs. But that kind of spending never holds up when times are tight.
Kansas City has already seen the rise and fall of the condo/loft craze. Now developers are desperate to get empty units off their hands (nullus) and have resorted to renting. The upper class interlopers just couldn't gentrify quickly enough and now the Westside and most of downtown is stuck with classy, pricey condos next to more typical urban housing that's sure to knock tens of thousands off of asking prices and produce an overall vibe of failure.
And then there is Electric Avenue. The downtown shopping district was constructed under the assumption that people had a lot of money to spend and the stars would align to ensure a vibrant area filled with consumers . . . That kind of situation in no way describes the current economic climate in Kansas City.
When cash is tight, there's no money for people to indulge in pricey food, luxury items or even trendy night spots. And it's now time for Mayor Funky and everyone else to abandon all hope of light rail in Kansas City - The proposal had it's time and place and Mayor Funky killed it . . . As far as the immediate future is concerned, any light rail plans are kaput.
Blame Bush, Osama or whoever but it is a fact that the financial climate in Kansas City is changing and a downtown built on dreams of consumerism and mass consumption of luxury items will not meet high expectations at the outset of a recession.
In fact, I'm guessing the whole thing is going to be a failure and the people of Kansas City are going to be left to pay the bill after the speculators, real estate people and all kinds of opportunists have abandoned this city because not even great propaganda from the local media could secure real world profits.
posted by Tony Permalink
You couldn't be more correct.
My god dude. How do you live with yourself. You're depressing me.
I've got a good job. I'll be okay.
the spec builders have been going under left and right for well over a year. Too many houses were being built and now sit empty. Good time to be a buyer, bad time for sellers and builders.
Give up your career as an economist Tony.
You clearly don't know what you're talkign about.
Downtown is going to be impressive when it's done.
Supply and demand .. Works every time.
Pulte pulling out of KC is not unique to our town. The large national home builders, such as Ryan and Pulte are all scrambling to offload lots and ground nationwide. Yes, it does have negative consequences locally, but this does not point to some sort of Kansas City inferiority as you like to point out so much on this blog. In fact, we are much better off than a lot of cities on both coasts. Also, recession is inevitable. It's called a business cycle. It could't hurt to trim off a little of the fat anyway.
Thanks for reading The Star.
This time around a decline in RV sales may not be as meaningful as in previous times because gas prices have never consistently around $3.00 per gallon. But, RVs have always gotten only 5-7 MPG.
I don't get The Star thing?
Tony are you making people at The Star jealous?
Gas prices have been high before, the 70's for instance, the RV stat is a good indicator.
anony 2:50,
As much as Tony likes to bad mouth the Star some of us find it ironic how often his posts are buttressed by links to Star articles.
Olathe econ,
Please provide data to prove your point.
I think the data from the Bloomberg article should suffice for this discussion. The RV indicator is a bellwether but feel free to ignore it at your own risk.
Tell me a year where Kansas City has never been in debt.
Wait till the lightrail years. Then we can talk about KC actually being in debt.
Pulte is relatively new to KC. 10-12 years at most. That said, they weren't local or early adopters that bought "cheap dirt." No easy margin to tackle made KC a tough market for them in general. Couple that with the fact that KC is actually a savvy town and Pulte's product is cookie cutter at best.
Pulte pulling out is a huge victory for local builders and for the culture of our city. Notice I said "our city." Take ownership and do something besides Neg-blog.
Celebrate KC originals folks! If you don't like this city and promote its growth and success move to another city where they'll welcome that attitude.
Pulte is inevitably having problems nationally so they're pulling out of "their" softer markets and blaming their problems on our market. It's a simple PR ploy. MISDIRECTION, public relations 101.
In summary, just because you read the news doesn't mean it is the only news.
If you residents of Kansas City or people that live at one hundred and stupid street are worried about KC Debt. Sleep well, you have Mayor Funk on your side. He's all about controlling cashflow. Let's all just hope that he doesn't suffocate progress in the interim.
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