The U.S. Metros Least Touched by Recession

A combination of stable home prices and sizable sectors in health care, energy, government, and education kept these metropolitan areas relatively stable

By Prashant Gopal

America's strongest economies have one thing in common—home prices that never got too hot or too cold.

Home prices in metros such as San Antonio, Oklahoma City, Pittsburgh, Rochester, Little Rock, Ark., and Baton Rouge, La., remained steady through boom and bust. Although no metropolitan area entirely avoided the economic downturn, the most resilient metros were protected by a potent mix of recession-resistant jobs.

The upstate New York areas of Syracuse, Rochester, Albany, and Buffalo suffered from declining jobs in manufacturing, but got significant boosts from sizable health-care, education, and government sectors. Construction is booming in Baton Rouge, Louisiana's capital, as firms take advantage of financing for post-Katrina hurricane recovery work and service-related companies expand to meet the needs of a growing population. Omaha and the state of Iowa have relatively strong insurance sectors.

Texas, the last state to enter recession, has been bolstered by its oil and gas industries—which have also helped Oklahoma, North Dakota, and Louisiana. Texas also has many other things going for it, including affordable home prices and relatively low wages, which attract corporations.

BusinessWeek.com used data and analysis from the Brookings Institution's new MetroMonitor to come up with the nation's 40 strongest economies. The MetroMonitor, which measures the nation's health on a quarterly basis, ranks the top 100 metros based on job growth, unemployment, gross metropolitan product, and home prices.

A relative boom in Baton Rouge

"No place has been untouched by this recession. This is a change from previous recessions," said Alan Berube, a senior fellow and research director of the Brookings Metropolitan Policy Program. "But there's a big difference in losing one-tenth of a percentage and losing 15% of jobs."

Baton Rouge, which was ranked No. 6, "grew jobs every month until August 2009 and in August it only lost nine-tenths of a percent, compared to 5.1% nationally," said Lauren C. Scott, professor emeritus of economics at Louisiana State University.

Scott said $5.1 billion of construction projects have been announced or are under construction in the Baton Rouge metro, including a new plant for French chemical company SNF and the expansion of an ExxonMobil (XOM) chemical plant.

"One nice thing after another thing happened that has countered what's happening in the rest of the country," Scott said.

Ernie Goss, an economist at Creighton University in Omaha, who studies much of the nation's energy and farm belts, said the strong dollar early this year hurt farm exports. "But the dollar has now weakened significantly and that will be good for the farm sector and energy commodities," Goss said. "I think 2010 is going to be much better than 2009. But we are still not going to have a lot of job gains.

A 22-year unemployment high in Texas

Although the metros in the ranking are strong by relative standards, their unemployment rates in many cases are now peaking because they entered the recession late. Texas, which had 5 metros in our top 10, including No. 1 San Antonio, is a good example.

The unemployment rate in Texas hit 8.2% in September, rising above 8% for the first time in 22 years. But that's a very low unemployment rate, compared to the national rate of 9.8% or to Nevada's 13.3% rate.

Texas is unlikely to face a prolonged downturn, said Terry Clower, an economist at the University of North Texas. The state's affordable cost of living make it attractive to new residents and corporations, the largest of which tend to be based near Houston and Dallas.

"It's perceived as a low-cost place to do business," Clower said. "Because housing is affordable, the wage rates reflect that."

Marisa Di Natale, a director at Moody's Economy.com, said late arrivals to the recession will generally face mild downturns.

These metros "haven't had a big erosion in housing wealth, which has kept consumer spending stronger than it would otherwise be," Di Natale said.

Dallas-Fort Worth-Arlington, TX

Overall rank: 5

The sprawling, vibrant, and diverse metro has a major international airport, professional sports teams, and large corporations. It is home to ExxonMobil, J.C. Penney, and TXU Energy. Employment in the Dallas metro peaked in the second quarter of last year. Gross metropolitan product in the second quarter was down just 1.7% from the peak in the third quarter of 2008. Home prices grew 3% in the second quarter compared with the same period a year earlier. And the unemployment rate in June was 8.2%, up 3.1 points from a year earlier. (Please see below for the various criteria used by the Brookings Institution to determine the overall ranking.)

Job growth (since peak) rank: 13
Gross Metro Product (since peak) rank: 11
Unemployment change (year over year) rank: 32
Home price change (year over year) rank: 3

The link below will allow you to view the entire list of the 40 strongest economies

http://images.businessweek.com/ss/09/10/1022_40_strongest_us_metro_economies/2.htm

Have a Great Weekend.

Why Business is Slow...

Sunday, someone asked me, "How's business, how's the market?" So I thought a second and replied, "Business is slow, but the market is fine!" **

So why is business slow? Because of my new addiction to Ragdollcannon.net I warn you, don't try it if you are responsible for running a business, being productive, or have any life apart from your computer.

**Actually business is brisk, but I do love that game!

$115,000 is the "new" $100,000

www.mymesquite.info

When I started my real estate career, you could still get a good house for right at $100K. Rowlett, Mesquite, South Garland were good neighborhoods with 1,500 sq. ft. or so and perfect for the starter-home-buyer. First time buyers ate those homes up and all an agent had to do was show them about 35 or so and BAMN! A Sale was Born!

Today, that market is very much the same, just a little more expensive. Becky and I sold our $100K home for about $115K and that's indicative of the starter-home market today.

Behold, one of JTOden Realty's best in that price range, the Flood's home at 809 Parker in Mesquite. MLS#11179085.

Two Cities in Texas are in the Top Five

By Forbes

Austin, Texas, is No. 2 on the list of cities where Americans are relocating. © Brandon Seidel/Shutterstock

Unemployment is on the rise, credit is tight and consumers aren't spending — which means they aren't picking up and moving much, either. Very few places in America saw significant population growth in 2008.

Despite the overall economic slowdown, some parts of the country keep on moving ahead, attracting more and more newcomers — even if it's at a slower pace than in more sound economic times. These places still offer a semblance of stability, as well as great weather, cultural life and, in many cases, affordability.

Behind the numbers

To determine the fastest-growing metro areas in the country, Forbes used 2008 population estimates for metropolitan statistical areas with a population of more than 1 million, released March 19, 2009, by the U.S. Census Bureau. MSAs are geographic entities defined by the U.S. Office of Management and Budget for use by federal agencies in collecting, tabulating and publishing federal statistics.

Forbes then compared the 2008 population estimates to the previous year's data to see which areas had grown the most, percentagewise.

The cities that made the list share similar qualities: more business opportunities, better weather and more affordable housing. The top three areas according to the data are Raleigh, N.C., ranking first, which jumped 4.29% to nearly 1.9 million; Austin, Texas, which came in second, with a 3.77% increase to almost 1.7 million; and Charlotte, N.C., which moved up 3.36% to 1.7 million.

All these areas' increases were smaller in 2008 than they were in 2007 (Raleigh increased by 4.7% in 2007, Austin by 4.29% and Charlotte by 4.2%), but a slight slowdown is not necessarily a bad thing, says William Frey, a demographer at the Brookings Institution, an independent research and policy group based in Washington, D.C. "Part of the story here is the rapid rise in growth in the middle of decade," he says. "That growth was unnatural."

The in-migration that happened in the middle of this decade certainly had a lot to do with the housing boom. When that went bust, so did those crazy population balloons. But these particular places are still growing because instead of building an economy that relies heavily on one industry, most of the metro areas on Forbes’ list serve as headquarters for a diverse range of companies.

For example, Austin's biggest employers include the University of Texas, Advanced Micro Devices and Dell. That wide range might have something to do with the area's relatively low January 2009 unemployment rate of 6.4%.

This is the opposite of what happened in true housing boom-and-bust towns like Las Vegas. In 2004, Las Vegas — a foreclosure mecca — saw a population increase of 4.6%, followed by 3.66% in 2005, 3.98% in 2006 and 3.22% in 2007. In 2008, that number fell to 2%.

The power of business

When it comes down to it, a buzzing business community is a metro area's most important characteristic, says Sean C. Safford, a professor at the University of Chicago and author of “Why the Garden Club Couldn't Save Youngstown: The Transformation of the Rust Belt.” He studies the social economics of U.S. cities and metro areas.

However, that doesn't mean that these metros won't suffer from a slowdown in population growth when 2009's numbers are released next year. Charlotte, for example, reported a 10.5% unemployment rate for January 2009, likely related to the fact that Bank of America is headquartered there. That high unemployment rate almost guarantees stunted growth in 2009.

"We don't quite yet know what the impact (of the ongoing recession) will be for 2009 populations," Frey says. "But we do know it's not going to get any better."

Indeed, where Americans are relocating today has little to do with where they'll be moving tomorrow.

Top 5 cities where Americans are relocating

1. Raleigh, N.C.

2. Austin, Texas

3. Charlotte, N.C.

4. Phoenix

5. Dallas

This article was written by Lauren Sherman for Forbes.

Mortgage Rates Continue to Fall

Freddie Mac reports a drop in the 30-year fixed mortgage rate to 4.82 percent during the week ended May 21 from 4.86 percent the prior week. Meanwhile, the 15-year fixed mortgage rate dipped to 4.5 percent.

The Federal Reserve is working to hold down rates by purchasing upwards of $1.25 trillion in mortgage-backed securities and $300 billion in Treasuries. Mortgage rate premiums have declined substantially over the last couple of months even as Treasury yields climbed. 

(Source: Investor's Business Daily (05/22/09))

Very Important Information !!!

At JTOden Realty, we take the business of home sales, purchases, and real estate investing very seriously.  

But that doesn't mean we take ourselves very seriously!  

We prefer big profits over big egos.

Who's Paying YOUR Mortage?

Senate Defeats Mortgage Cramdown Bill

The proposed law allowing bankruptcy judges to modify mortgages, known as the cramdown bill, was voted down Thursday by the U.S. Senate.The financial industry opposed the bill, arguing that the change would drive up interest rates and make the market less stable.

Some senators also were concerned that their constituents who pay their bills on time would resent this measure.Minority Leader Mitch McConnell, who led the opposition, says the vote "ensures that homeowners who pay their bills and follow the rules won't see an interest-rate hike at the whim of a bankruptcy judge."The reform was a key part of President Obama’s foreclosure prevention plan, leaving some to question ultimate likelihood of its success."It won't render the loan modification program useless, but it removed an important ingredient that would have helped realign everybody's interests," says Barry Zigas, director of housing policy for the Consumer Federation of America.

Source: CNNMoney.com, Tami Lubby (04/30/2009)