Monday, December 18, 2006

U-haul index revisited

It shocks me to be reading on how the U-haul index is getting worse right now. Back in August I blogged about it and there were sites where I cost 4 times as much to rent a U-haul one way as the other. For those who don't recall, the U-haul index is an indicator of the directionality of job flow in or out of a region. So I decided to revisit it.

My previous article:
http://recomments.blogspot.com/2006/08/uhaul-index-job-flow-directionality.html#links

A quick review of the U-haul intex:
1. Pick a city and see how much it costs both ways to rent a U-haul in/out of the area to multiple destinations.

2. The more expensive direction is the direction that has an unbalanced surplus of jobs going in that direction.

3. If all destinations from a city are more expensive, it means a net-outflow of jobs.

4. The further the travel, the more likely prices also reflect interactions of mid-point job flows. But it should give a trend.


I’m going to redo the same cities to/from Redondo beach that I did before. The format is to see how much it costs to go to 90277 (zip code) to the city mentioned and from. Again, I pick a Saturday departure to emphasize the cost penalty of directionality (depart, 26’ truck on 1/13/2007

Prices from city listed to 90277/Prices from 90277 to city listed:

Las Vegas, NV: $1,168 from Redondo, $276 to Redondo

Pheonix, AZ: $973 from Redondo, $181

Dallas, TX: $3,650 from Redondo, $730

Austin, TX: $3,650 from Redondo, $486

Spokane, WA: $5,544 from Redondo, $406


What can we conclude?


First, lets look at the old results from August:

90277 to Las Vegas: $638 Return: $226

90277 to Phoenix, Az: $670 Return: $131

90277 to Dallas Texas: $3,389 Return: $827

90277 to Austin Texas: $6,439 Return: $575 Yes, over 10X more expensive!

90277 to Spokane, WA: $4,845 Return:$199

In all cases it costs a hefty multiple to get out of Redondo to these out of state destinations. So we see that job flow out of California continues. Whatever crunch U-haul faced to Austin has mitigated a little. A very little… It is still crazy expensive to move to Texas yet a relative bargain to return. The $3k premium to Austin over Dallas has disappeared, that’s it… The difficulty in getting trucks back from Austin is reflected in the discounted return price (compared to Dallas).


It appears I was only a little “optimistic” predicting that by Mid-October Joe Sixpack would know that home prices are declining. But I wasn’t too far off. He and Jane Sixpack know home prices are weak to declining. They just believe the NAR propaganda that prices will recover.


I’m still floored by the demand to Spokane Washington. I have no clue as to why… but the premium has persisted. Is there such a job flow to Spokane that getting there from anywhere is expensive? Pheonix to Spokane was $2,542 while the reverse was $1,117. So there is definitely a Spokane premium. I just cannot believe Redondo is having to pay a $5,000 premium.


The longer people dig their heads in the sand the more population will capitulate and leave the state. On one hand, that’s good for those that want to stay in state. On the other, there is a point to where workers deserting will break the economy.


2007 will be interesting for SoCal real estate. For the most part the California U-haul index is staying the same: bad. Really bad.

Neil

3 comments:

Anonymous said...

Spokane = Boeing (new jobs)?

Also, your rumor...is it weakening or getting stonger? I'm just wondering how many other large companies are looking to relocate...at least some of their offices/divisions?

wannabuy said...

Also, your rumor...is it weakening or getting stonger? I'm just wondering how many other large companies are looking to relocate...at least some of their offices/divisions?
The rumor is smoldering right now. For the most part, most have put it into the back of their minds and are trying to forget about it during the holidays.

However, I am out of state right now on a multi-company project. During an unusual lull yesterday, a couple managers had a little bull session. All of us owned up to how our company was having a hard time hiring candidates. Basically we're all doing the same thing:
1. Cheery pick candidates that we have to get into California. Offer those candidates more pay. But this is more common at one company (not mine) that at any of the others.
2. Make offers to other candidates that you know will be rejected. A few people accept anyway. If the candidate is brave enough to reject the offer but keep negotiations open for a better income to cost of living... they're often offered a different position out of state.
3. Slow leakage of jobs to out of state divisions. This seems to be holding steady. (In other words, not to many jobs, but enough that no one can miss it.)

I do know that one of our Lockheed has commited to moving 400 to 700 engineers to Colorado. (Amazing how quiet they were about that...) Not to mention Lockheed has commited to move "Orion" to Houston (That's over 1,000 jobs that were expected to be in LA going out of state. Quite a few hundred are currently station in the south bay, soon to move to Houston.)

http://tinyurl.com/yyax4k

So it might actually just be a steady trickle where project by project aerospace jobs leave southern California. No decision will be made by my company before June (probably later).

Neil

new house ventura ca said...

companies marketing mineral makeups and also get the best bargains in mineral makeup you can imagine,
find aout how to consolidate your students loans or just how to lower your acual rates.,
looking for breast enlargements? in Rochester,
homeopathy for eczema learn about it.,
Allergies, information about lipitor,
save big with great bargains in mineral makeup,

change edition interviewing motivational people preparing second
,

interviewing motivational people preparing second time
,

interviewing people motivational preparing for a second time
,

black mold exposure
,

black mold exposure symptoms
,

black mold symptoms of exposure
,

free job interview questions
,

free job interview answers
,

interview answers to get a job
,

lookfor hair styles for fine thin hair
,

search hair styles for fine thin hair
,

hair styles for fine thin hair
,

beach resort in the philippines
,

great beach resort in the philippines
,

luxury beach resort in the philippines
,
iron garden gates, here,
iron garden gates,
wrought iron garden gates
, here
,
wrought iron garden gates
,
You: The Owner's Manual: An Insider's Guide to the Body That Will Make You Healthier and Younger
,
answer from more much,
eat eating mindless more than think we we why
,
la times classified,
new york times classified


texturizer,
texturizers here,
black hair texturizer,
find aout how care curly hair,
find about how to care curly hair,
care curly hair,
lipitor rash,
lipitor reactions,
new house ventura california,
the house new houston tx,
new house washington dc,
new house washington dc,
new house ventura california,
the house new houston tx,
the house new houston tx, that you ar looking for,
new house ventura california, you need to buy,
new house washington dc,

hair surgery transplant
,

air filter allergy
,

refurbished dell laptop computers
,

hair surgery transplant
,

air filter allergy
,

refurbished dell laptop computers
,

hair surgery transplant
,

air filter allergy
,

refurbished dell laptop computers
,

chocolate esophagus heartburn study
,

chocolate esophagus heartburn study
be informed,

digestion healing healthy heartburn natural preventing way
,

digestion healing healthy heartburn natural preventing way
,


Allergies, lipitor rash,
alcohol rash,
lipitor and alcohol,
lipitor alcohol,

natural remedies to aid healing of esophagus
,

chicory heartburn
,

effectiveness of zocor vs. lipitor
,

chocolate esophagus
,
southwestern wrought iron yard gate,
exterior iron gates,
oriental wrought iron gates,
powder coated iron garden fencing,