Housing slump already hurts Silverton, Ore. business

A community in Oregon of approx. 9,000 people is about to feel the impact of a national problem: The sales of new homes is down to a 13-year low, and analysts say this slump could last from 2006 to 2009, according to an Associated Press story.

Meanwhile, according to the Statesman Journal newspaper today, “Champion Enterprises notified Silverton's mayor that it would shut down its Redman Housing plant by May 23” in Silverton, Ore. When the company that builds manufactured homes closes, it will cost about 160 jobs to the community.

While the city hopes another business will buy the manufacturing facilities and generate other jobs, this may be a sign of bigger problems down the road: A recession on its way.

“Many analysts believe the (housing) slump could combine with a multitude of other problems including a severe credit crunch, soaring energy prices and plunging consumer confidence, to push the country into a full-blown recession,” said AP.

Large companies in small towns mean jobs, and when those businesses close down, their impact is huge, not just for those directly who are employed, but for all the other benefits and money injected into the community.

Outside of Silverton, other natural resource industries and businesses will also be watching closely what happens with housing across the country. For example, the slower sale of new homes will hit the timber and nursery industries that supply materials and landscaping to these new homes.

The Western states are supposedly not facing the housing crisis as badly as other states. “Sales dropped the most in the Northeast, falling by 40.6 percent. Sales were also down in the Midwest, dropping by 6.4 percent, but posted gains in the South of 5.7 percent and 0.7 percent in the West,” reported AP.

I’d be curious to hear from our blog readers in other parts of the country on what they are seeing in their communities, especially in how it may affect their rural areas and agricultural businesses.