Home prices will be effected by a Screenwriters Guild strike

Posted at 7:35 PM, Nov. 4, 2007

Home prices will be effected by a Screenwriters Guild strike

More than any other group the unemployed tend to loss their homes. Thus, the impact of a strike by Writers Guild of America effecting the entertainment industry, a major source of income for those in Los Angeles county, is very noteworthy.

The impact of a strike is likely to be widespread. First effecting those directly employed by those in the industry and other business used in the day to business of producing entertainment, such as caters and security. A strike of 2 months or more will effect places business further down the spending chain such as art galleries and coffee shops.

The areas likely effected by a strike will be areas not seriously effected by the sub prime woes. Hollywood, West Hollywood and most of the west side are likely to be the hardest hit. If a prolonged strikes occurs, foreclosures will put significant pressure on prices.

I think it is interesting that the last strike preceded the last major slow down in housing. I am not suggesting that there is a cause an effect relationship between the two. However, I do not think that a strike effecting a significant economic segment in an economic environment of housing weakness can lead to anything positive in home prices.