Man I swear you can’t get on the local websites - either the Statesman or the Idaho Business Review without hearing some realtor or developer tell us - “Ah heck, housing is coming back. Don’t worry about it. All these rate cuts, people will be snapping up the cheap money to buy everything in sight.”

Uh huh.

Tip from an ersatz economist: people without jobs don’t borrow money, even when it’s cheap, to buy houses.

Here is the real story that I have not seen anywhere in the Idaho press:

Housing slump brings shutdowns at 18 Pacific Northwest sawmills
by The Associated Press
Tuesday February 05, 2008, 2:26 PM

LONGVIEW, Wash. — A slump in the housing market and low lumber prices have resulted in shutdowns at 18 sawmills in the Pacific Northwest, industry experts say.

For the Simpson Timber mill in Longview, the shutdown this week is the second curtailment of production of 2-by-4,s 2-by-6s and other lumber made from Douglas fir in a month. Work hours also were cut for a week starting Jan. 21.

Analyst Claudia Shank Hueston of JP Morgan told The Daily News of Longview four other mills around the region also are shut down this week.

All told, she said, 18 mills in the region are being shut down for varying periods, including indefinite closures of Hampton Lumber operations in Morton and Willamina, Ore., Seneca in Eugene, Ore., and Rosboro Lumber in Vaughn, Ore.

With homebuilding drastically reduced, lumber prices fell to $238 per 1,000 board feet at the start of the month, 15.6 percent lower than a year ago, according to the trade publication Random Lengths.

In Longview, where 100 workers have been idled, the mill received logs Monday and Simpson officials will decide on a week-to-week basis when to resume production, said Dave McEnntee, vice president of operational services and external affairs.

“As we take downtime, that affects inventory. It just depends on where prices are in the marketplace,” McEnntee said.

Simpson paid $26.5 million to buy the mill from Caffall Bros. at the end of 2006.

Yes, folks. Those who supply the housing industry are cutting production, and laying people off. Housing is not coming back. Housing is still declining. Prices are going to drop further yet. Builders, do what I advised previously: start building product that makes sense. That is - in the City, with smaller square footage, close to existing services and JOBS.

I just scratch my head at CBH and Hubble who are STILL submitting massive subdivision plats in the middle of nowhere, and bitching about impact fees, while smart guys like David Hale, are proposing cool projects that 1) make money, and 2) appeal to the market.