The US economy is down 10 million jobs, roughly a 6% decline, from where it was one year ago. But the brunt of those job losses is being felt in two areas – the Northeast and West Coast.
New York, Massachusetts, New Jersey, California, and Nevada account for 40% of the nation’s job losses on their own. Each of those states has experienced a roughly 10% decline in jobs from its respective level one year ago.
Meanwhile, Flyover Country and the Sun Belt is much better off. Idaho is the top-performing state, with only a 1% decline in jobs, while Utah is in second at a 2%. Most of the other Flyover and Sun Belt states are in the 3-5% job loss range.
Another way to think about these figures is in a comparative fashion. New York’s 12% year-over-year job losses are:
Those regional differences are astounding. And fairly unprecedented. The hardest-hit states in the Great Recession – Nevada and Arizona – only experienced job losses of roughly 7%.
Similar comparisons can be made at the metro-level. Austin is the best performing large metro in the country, with only 2.7% YoY job losses, 5x better than the New York Metro, and over 2x better than the national average.
Two other marktes – Indianapolis and Knoxville – have kept their job losses below 3.0%. Markets like Tucson, Phoenix, and Dallas have kept them under 4.0%.
Meanwhile, the 10 worst performing metros have all logged job losses over 10% compared to one year ago.
The presence of Los Angeles, Boston, San Francisco, and New York shows the economic toll the recession has taken on Gateway markets in the Northeast and West Coast. There’s also an interesting presence of declining Northeast and Midwest Rust Belt cities – Detroit, Bridgeport, Cleveland, and Rochester – that show up on the list.
The Northeast and West Coast recession has interesting implications for real estate investment.
Generous fiscal stimulus payments have partially masked the impact of the job losses in these regions on local real estate markets. But as the stimulus subsides these areas will experience reduced household formation and lower consumer spending. Cash flows and values for multifamily and retail properties will drop as a result.
This could be a devastating blow to the real estate market in a place New York. The state was already suffering from an aging population, declining tax base, and elevated prices. Now introduce a depression-level employment shock. That’s a tough cocktail to recover from.
I’d be more optimistic about California. The state’s burgeoning tech scene and housing supply constraints create strong investment fundamentals. It also has a fairly young population.
Was Tax Day more of a burden this year than years past? If you’re wondering whether there’s an escape from the inevitability of taxes let us give you the tools to analyze for yourself. Believe me, you’re not alone and not all states are created equal.
Oil Prices are Surging. Consumer Sentiment is Crashing. The odds of a 2022 Recession have SKYROCKETED in recent months.
Home is where the heart is. Even in this volatile housing market you will always need a place to call home.
Has uncertainty and rising costs made home ownership unaffordable for many Americans? Let us provide some tools and analysis to help you find out for yourself.
The decision to buy or rent can be daunting and hopefully this methodology will help you in this monumental and stressful task. This article is meant to serve as a guide to assist in determining the true cost of home ownership for your situation.
Millennials are supercharging the 2022 Housing Market, right? Wrong according to data from the US Census. In fact, Millennials are BOYCOTTING the Market.
Home Prices are up 20-30% across states like Florida and Texas in 2021. But there’s no growth in the number of people moving there. Is this a colossal bubble?
How bad will the 2021 Housing Crash be? Find out by looking back in history at the WORST Housing Crashes of all-time.
Florida’s Housing Market is BOOMING in 2021. But could the state be heading for another 50% crash in Home Prices? Certain data says that’s a possibility.
Surging Construction Costs in 2021 are being blamed for the Housing Market Mania being experienced in the US. Yet the data tells a very different story.
Sign up to hear insights from Reventure
