Tuesday, December 8, 2009

What Do Fewer Liens Mean?

The Orange County Register development blog has a new story suggesting that fewer legal disputes related to real estate construction is, in the big picture, actually a bad sign:

Mechanics liens are typically filed when contractors working on a real estate property — home or commercial, new or old — go unpaid for their services.

Trends in these liens filed often reflect both the level of construction work done as well as the general health and bill-paying abilities of the overall economy. Thus, the recent drop may say more about the near-dead construction industry vs. hinting at some improvement in the local business climate.

This is one of the stranger economic indicators I've seen to date.  I guess we should be rooting for more housing subcontractors to get stiffed in the payment of bills?

--Chad Emerson, Faulkner U.


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