Housing Industry Woes Affect Related Businesses
RENEE MONTAGNE, host:
Here's one indicator of how bad the housing crisis in Arizona still is: Half the existing homes sold in the Phoenix area last month were foreclosures. And the depressed housing market continues to ripple through other parts of the economy there, as Peter O'Dowd from member station KJZZ reports.
PETER O'DOWD: Take the moving industry, for example.
(Soundbite of truck starting)
O'DOWD: This diesel truck belongs to Jim Negrete. He's the owner of Budget Movers in Phoenix, and with more than 4,000 foreclosures in the area last month, you might think his business would be gangbusters. It's not.
Mr. JIM NEGRETE (Owner, Budget Movers): The last probably two, three years were probably the worse I've ever seen. I never worried about, you know, money or having work till things got really bad with the economy.
O'DOWD: Negrete says people in foreclosure don't have the money to hire him. He once averaged 150 moves a month. Now, Negrete says, it's closer to half that. He's cut back his drivers' hours and he's stopped taking checks as payment -too many of them bounced. Negrete's business depends on a healthy housing market in Phoenix.
But that's a concept that no one around here has heard of in a long, long time.
Mr. NEGRETE: I don't think we're out of the woods yet, and from everything I hear it's probably going to be another couple years before it does get better, and hopefully we'll make it through that.
Ms. LINDA DARR (President, American Moving and Storage Association): We started to see a turnaround this year, but I'm not sure if that's going to be sustained or not.
O'DOWD: Linda Darr is the president of the American Moving and Storage Association. She says about a quarter of her members have gone belly-up since the housing downturn began. But the first half of this year had shown progress. Residential shipping volume went up 11 percent after several years of contraction. Darr says people had renewed faith in the economy, but continued uncertainty in the housing market put that short-term growth at risk.
Ms. DARR: I don't think that it's ever going to be stagnant for a very long period of time, because we are a mobile nation.
(Soundbite of stapling)
O'DOWD: People like Kevin Rowan don't expect a turnaround any time soon. He's in the business of making crates and boxes and shipping goods across the country.
Mr. KEVIN ROWAN: Particularly artwork, small furniture moves, things that the major movers won't touch.
O'DOWD: Rowan has seen sales drop 40 percent in the past two years. Lately, his customers just abandon their stuff on the way out of town.
Mr. ROWAN: As opposed to moving them and shipping them, they're leaving behind some of their furniture and making that valued decision of, you know, I can spend $600 to ship it or I can just buy the few things I need when I get there.
O'DOWD: And that affects you?
Mr. ROWAN: Absolutely, absolutely.
O'DOWD: Rowan is standing next to a 450-pound gargoyle statue that's bound for Washington State. His warehouse is about a quarter full. In good times we wouldn't be able to stand here. But Rowan refuses to let news of a foreclosure moratorium discourage him. He says he doesn't expect a recovery until at least 2012 anyway.
Mr. ROWAN: I still enjoy it. So as long as I enjoy it, I'll be here.
O'DOWD: And there is another casualty of an extended foreclosure crisis.
(Soundbite of banging)
Mr. CHAD OLSON: We're looking at abandoned items - metal bed frames, vacuums that may or may not work.
O'DOWD: Chad Olson runs a moving and storage company. His crew rolls open the door to a 10-by-20 storage unit. It's cranked to the ceiling with junk.
Mr. OLSON: And it's going to be on its way to the dump probably within a week or two.
O'DOWD: On one hand, Olson sees strong demand from people looking for a place to store the contents of their home after they've been evicted. Increasingly, though, the bills go unpaid. It costs Olson a few hundred bucks every time he hauls a load like this to the dump. It's just another way the business has changed.
Mr. OLSON: There's a human element to this whole thing and, you know, we move people out of their dream homes every single day.
O'DOWD: Banking and housing experts say this turbulence will continue and a foreclosure moratorium could lock the gears of some industries that were just starting to show signs of moving.
For NPR News, I'm Peter O'Dowd.
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