Unemployment - The next big problem for the housing market
California Housing Crash, Florida Housing Crash, The Economy, Real Estate September 3rd, 2008
This from CNBC:
Rising Unemployment May Deepen Housing Slump
In the Riverside-San Bernadino-Ontario metro area in southern California, the median price of an existing home was down 32,.7 percent from a year ago, as of the second quarter, based on data from the national Association of Realtors. The jobless rate there was 8.9 percent in July vs. 4.5 percent in April 2006, around the general peak of the housing boom.
A slowdown in the massive trade sector of Southern California, for instance, is having a negative trickle down effect on that metro area and others.
In Florida, the Cape Coral-Fort Myers metro area has seen prices fall 33.1 percent during the same period, while the unemployment rate has jumped from an average of 4.7 percent in 2007 to 7.5% in July.
In economically depressed Michigan, the jobless rate was 8.5 percent in July vs. 6.8 percent in April 2006, when the national economy and housing market were both healthy. In Ohio, the rate was 7.2 vs. 5.4 two-plus years ago. Prices in the Lansing and Cleveland metro areas are down 19.0 percent and 17.0 percent, respectively.
“There’s definitely a relationship,” says Baker. “Where there’s unemployment, there’s downward pressure on prices.”
