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
Prices from city listed to 90277/Prices from 90277 to city listed:
What can we conclude?
First, lets look at the old results from August:
90277 to
90277 to
90277 to
90277 to Austin Texas: $6,439 Return: $575 Yes, over 10X more expensive!
90277 to
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
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
2 comments:
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?
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
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