Friday, October 23, 2009

Nationwide Trends in Housing....

The Wall Street Journal has excellent coverage of housing and employment trends this week. This interactive map gives the "percentage of first-lien home mortgages that are overdue or in foreclosure".  This table couples the housing inventory and jobless rate with a "delinquency and foreclosure rate".  Neither chart paints a very pretty picture. The Seattle MSA has seen a 20% decrease in housing supply (albeit still 8.2 months worth) but the market is crippled by a 10% unemployment rate where 8.1% of the homes are in "delinquency or foreclosure".

James Haggerty's excellent short article  "Is the Housing Market About to Get Even Uglier" explains why the backlog of foreclosures and delinquencies may depress the housing  market for years.  The key to economic recovery is discussed in this article  by Conner Dougherty  "Signs of Recovery don't Extend to Jobs".  The good news is that Washington State is currently experiencing lower unemployment than either Oregon or California.

In testimony before the Joint Economic Committee this week, chair Christina Romer noted:

"Consistent with the recent cyclical pattern, the unemployment rate is predicted to continue rising for two quarters following the resumption of GDP growth. Whether this happens and how high the unemployment rate eventually rises will obviously depend on the strength of the GDP rebound. Leaving aside timing issues, the unemployment rate typically falls when GDP growth exceeds its normal rate of roughly two and a half percent per year and rises when GDP growth falls short of this pace. With predicted growth right around two and a half percent for most of the next year and a half, movements in the unemployment rate either up or down are likely to be small. As a result, unemployment is likely to remain at its severely elevated level."

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