RealtyTrac released its 2009 metro-level foreclosure activity report today. There is a definite “good news-bad news” angle to the Kansas City data. First, the bad news: there were more foreclosures in 2009 than there were in 2008. All told, 15,067 homes in the Greater Kansas City area had at least one foreclosure filing in 2009. This is an 11 percent increase from 2008 and a 50 percent increase over 2007. This represents 1.75 percent of housing units in the area, or one out of every 57 homes.
Now for the good news angle: the Kansas City area had fewer foreclosures than a lot of other areas, ranking 79th out of the largest 203 metros in the country in terms the percentage of homes in foreclosure. Our 1.75 percent rate falls well below the national average of 2.21 percent. Among our 9 peer metros, Kansas City ranks 5th on the list behind Salt Lake City (2.91 percent), Denver (2.78), Indianapolis (2.47), and Portland (2.26). Of our peers, Omaha had the lowest rate at .52 percent.
Las Vegas, Nev., was on top of this dubious list, with over 12 percent of its housing units — one out of every eight homes — in foreclosure in 2009. The top of the list was dominated by metros in the southwest and in Florida. In fact, 27 of the 30 metros with the highest foreclosure rates were in California, Nevada, Arizona or Florida.
Thursday, January 28, 2010
Tuesday, January 5, 2010
Metro Unemployment Rate Declines Slightly in November
Kansas City’s unemployment rate declined for the second straight month in November, although the decline was slight — from 8.4 percent to 8.3 percent. This is the lowest the local unemployment rate has been since April.
Looking under the surface we see that the decline occurred primarily because people dropped out of the labor force. The labor force dropped by 2,866, which overshadowed the decline in employment of 1,644. So even though there were fewer jobs, the unemployment rate dropped — because fewer people were participating in the workforce. For more on how the unemployment rates are calculated see our glossary. As we have mentioned before, we would prefer to see declining unemployment rates because employment is rising faster than the labor force.
By way of comparison, the national non-seasonally adjusted unemployment rate was 9.4 percent. (The adjusted unemployment rate was 10 percent. Since metro level seasonally adjusted unemployment rates are not available, we use the non-seasonally adjusted national figure for comparison.) Missouri’s unemployment rate rose to 9.2 percent from 8.9 percent in October. Kansas continues to have one of the lowest unemployment rates in the country at 6.2 percent.
Looking under the surface we see that the decline occurred primarily because people dropped out of the labor force. The labor force dropped by 2,866, which overshadowed the decline in employment of 1,644. So even though there were fewer jobs, the unemployment rate dropped — because fewer people were participating in the workforce. For more on how the unemployment rates are calculated see our glossary. As we have mentioned before, we would prefer to see declining unemployment rates because employment is rising faster than the labor force.
By way of comparison, the national non-seasonally adjusted unemployment rate was 9.4 percent. (The adjusted unemployment rate was 10 percent. Since metro level seasonally adjusted unemployment rates are not available, we use the non-seasonally adjusted national figure for comparison.) Missouri’s unemployment rate rose to 9.2 percent from 8.9 percent in October. Kansas continues to have one of the lowest unemployment rates in the country at 6.2 percent.
Wednesday, December 16, 2009
Local Housing Sector Shows Real Strength in November
According to data released today by the Kansas City Regional Association of Realtors (KCRAR) there were 2,454 home sales in the area this past November. This is sharp increase from November 2008 when only 1,518 homes sold. As Chart 1 shows below, home sales have remained steady after peaking in the summer months. In a typical year, home sales will dip in fall and winter as shown in chart 2. This dip is largely absent in 2009. It appears that incentives such as the first-time homebuyers program and low mortgage rates have buoyed home sales, even during what have traditionally been slow months.
CHART 1
CHART 2
The news is good not only in terms of homes sold, but also in rising prices. The average sale price was significantly higher last month, at $160,621 compared to $155,195 in November 2008. The figures are even more impressive for existing homes, where the average sale price jumped by nearly $12,000 from one year ago ($136,000 to $148,000).
All told, this is the best home sales news we have received in three years. Home sales are up (although they have a long way to go to get back to numbers we saw prior to the recession), sale prices are up, and inventory is down, as is the length of time it takes to sell a home.
Many economists, including ourselves, believe that a resurgent housing market is key to any economic recovery. If these November numbers truly signify a housing market on the rebound, then we can begin to feel more optimistic about the economy as a whole. It is possible that the federal homebuying programs are simply shifting future sales to the present. If so, while this relieves some of the current pent-up demand, sales next spring might not pick up as much as usual. Time will tell.
Friday, December 4, 2009
Kansas City’s Unemployment Rate Sees Significant Drop in October
The Kansas City area’s unemployment rate fell one half of a percentage point between October and September (8.9 percent to 8.4 percent). This is the first decline in unemployment since April. This is certainly good news as we look to put this recession behind us, but the story behind the numbers is not all that rosy.
The unemployment rate declined because the labor force declined significantly (by 6,146) while employment declined only slightly (414). This means while the number of jobs available is stable, the number of people looking for work has declined. We would prefer to see the unemployment rate decline because the number of available jobs has increased more than the increase in labor force, but considering where we have been, a lower unemployment rate and an apparent end to the huge job loss numbers — for whatever reason — is at least something to feel positive about.
PDF Version of the Map
The decline in unemployment rate that Kansas City experienced in October was not unique. Many metros across the country saw declines, especially in the New England states, upper Midwest and Michigan, where the recession has been particularly hard. The unemployment rate still increased between September and October in South Carolina, Ohio, Indiana, Illinois and many of the smaller metros in California.
PDF Version of the Map
Compared to last year, all metros saw an increase in unemployment rates. Kansas City’s rate jumped from 6.0 percent in 2008 to the current 8.4 percent. This increase places Kansas City right in the middle in terms of unemployment rate change. The greatest increases in employment rates were seen in parts of the south, the Great Lakes area and the Pacific coast states. The Midwest and Northeastern states had smaller increases.
The unemployment rate declined because the labor force declined significantly (by 6,146) while employment declined only slightly (414). This means while the number of jobs available is stable, the number of people looking for work has declined. We would prefer to see the unemployment rate decline because the number of available jobs has increased more than the increase in labor force, but considering where we have been, a lower unemployment rate and an apparent end to the huge job loss numbers — for whatever reason — is at least something to feel positive about.
Metro unemployment rates held a familiar pattern in October. The highest unemployment rates continued to be in the Southeast, Great Lakes region and in California and Oregon with the upper Midwest having the lowest unemployment rates in the country.
PDF Version of the MapThe decline in unemployment rate that Kansas City experienced in October was not unique. Many metros across the country saw declines, especially in the New England states, upper Midwest and Michigan, where the recession has been particularly hard. The unemployment rate still increased between September and October in South Carolina, Ohio, Indiana, Illinois and many of the smaller metros in California.
PDF Version of the Map
Compared to last year, all metros saw an increase in unemployment rates. Kansas City’s rate jumped from 6.0 percent in 2008 to the current 8.4 percent. This increase places Kansas City right in the middle in terms of unemployment rate change. The greatest increases in employment rates were seen in parts of the south, the Great Lakes area and the Pacific coast states. The Midwest and Northeastern states had smaller increases.
Friday, November 20, 2009
Missouri and Kansas See Employment Bump
Both Missouri and Kansas had reason to smile with today’s release of the seasonally adjusted state employment figures. Employment in Kansas increased by 2,800 jobs between September and October, while Missouri employment jumped by 4,000. This is the greatest monthly increase in Missouri since January 2008. Kansas had a sharp increase of 7,400 jobs last July, but it was followed by two months of decline that erased that growth.
Unemployment rates fell in both states (from 9.5 percent to 9.3 percent in Missouri and from 6.9 percent to 6.8 percent in Kansas).
Hopefully we will be able to look back at these October figures as the beginning of employment expansion in both states. We should note that 29 states experienced a decline in employment over the past month so both Missouri and Kansas are in the happy minority.
Metro level data will be released on Dec. 2. We will see if the Kansas City area follows the state trends.
Unemployment rates fell in both states (from 9.5 percent to 9.3 percent in Missouri and from 6.9 percent to 6.8 percent in Kansas).
Hopefully we will be able to look back at these October figures as the beginning of employment expansion in both states. We should note that 29 states experienced a decline in employment over the past month so both Missouri and Kansas are in the happy minority.
Metro level data will be released on Dec. 2. We will see if the Kansas City area follows the state trends.
Thursday, October 29, 2009
US Economy grows in 3rd Quarter
After contracting for four consecutive quarters, the US economy saw economic growth of 3.5 percent this past quarter. According to the Commerce Department, the upswing in economic activity was helped in large part due to increased consumer spending as consumers took advantage of government program to purchase cars and homes. Many of these programs such as “cash for clunkers” have ended or will end soon so it will be interesting to see if the economy can put back to back positive quarters. Most economists, including ourselves believe that this quarter’s growth will eventually mark the beginning of an economic recovery. This recovery does not look to be very robust as unemployment remains high and credit is still proving more difficult to get, but just getting some major positive news could boost our confidence and get the economy going again.
Perhaps best demonstrating the weak nature of this recovery is the current unemployment picture. The Bureau of Labor Statistics released the September unemployment rates for the Kansas City area. For the third straight month, Kansas City’s unemployment rate stood at 8.9 percent.
Employment has always been a lagging indicator. The economy will show real growth for several quarters before we can expect any real growth in employment. We are certainly not out of the woods yet, but we can at least begin to gain some confidence that we are on the right path.
Perhaps best demonstrating the weak nature of this recovery is the current unemployment picture. The Bureau of Labor Statistics released the September unemployment rates for the Kansas City area. For the third straight month, Kansas City’s unemployment rate stood at 8.9 percent.
Employment has always been a lagging indicator. The economy will show real growth for several quarters before we can expect any real growth in employment. We are certainly not out of the woods yet, but we can at least begin to gain some confidence that we are on the right path.
Thursday, October 8, 2009
Kansas City Metro Economy is Nation’s 28th Largest
Kansas City’s economy (measured by gross domestic product) generated over $100 billion in activity in 2008 according to the Bureau of Economic Analysis. This ranks as the country’s 28th largest economy right between Cleveland and Cincinnati.
Kansas City’s gross domestic product has enjoyed steady growth since 2001 (when the data series was started), growing 13 percent in real terms. Even with the recession, Kansas City’s economy grew 1.3 percent between 2007 and 2008.
Kansas City’s gross domestic product has enjoyed steady growth since 2001 (when the data series was started), growing 13 percent in real terms. Even with the recession, Kansas City’s economy grew 1.3 percent between 2007 and 2008.
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