Nampa, Canyon outlook hopeful

A national investment adviser told businessmen and community leaders in Nampa to expect a revival of sales and construction in the housing market come spring.

As the banking industry tries to balance the subprime market, the economy has continued to grow, said Kent Burns, portfolio manager with Franklin Advisors, Inc. in San Mateo, Calif.

“Most investors are moving away from mortgage-backed securities, and so financing is not available on homes,” he told the more than 250 people gathered in the Nampa Civic Center Tuesday morning. “We could see that come back by spring, and if so, we could be back building homes again.”
Burns’ comments were part of the Economic Impacts 2007 presentation presented by the Nampa Chamber of Commerce. The annual meeting brings civic and business leaders together to hear experts talk about the growth and development in the region and nation that will affect them.
“This will take a few months to work itself out,” he said. But, Idaho, and particularly the Nampa area, is in a great condition to pass through the economic turmoil due to a number of factors: low unemployment, job growth and understanding real estate market saturation.
“Job creation has slowed down in this area and around the nation, but [corporate executives] are not out there laying off thousands of workers,” he said.
Burns praised the Fed and its chairman, Ben Bernanke, for being insightful enough to weigh all the signs before adjusting the federal interest rate. The Fed, Burns said, is a method of controlling the economy in its up and down motions. Higher rates hold housing in check and keeps inflation in balance.
The housing market is a good example of how the rates are holding back sales, but not stifling them. He said people with good credit can still get a home loan. It’s those who do not have established credit or poor credit who are on the edge of qualifying. The subprime lending market was a key factor in driving the building boom of two years ago, and the check point now is to get the housing glut off the market.
“It may take through ’08 to take down the housing market excess,” he said.
Energy reserves – oil and gas – are another area of concern for the Fed and investors. The average wage earner is impacted more drastically when the gas prices go up, but the top end earners absorb the inflation and carry on as usual.
“If these prices continue to go up, that would be harder to control,” he said.
Another area of concern is the weakening of the U.S. dollar in the world economy. As other nations accumulated the dollar for trade purposes, they are not putting those dollars back on the market as their economies are strengthening. That could depress the dollar even further.
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To contact the author, e-mail robb.hicken@idahobusiness.net.