CoreLogic asks if Poor Construction Hiring is New Normal - Key West Homes for Sale in Old Town Key West Florida

Post by Joe D Wells – by Jann Swanson

CoreLogic asks if Poor Construction Hiring is New Normal

Data presented by CoreLogic in its new edition of MarketPulse raises an interesting question about employment in the construction sector.  Is the slow pace of hiring the result of a fundamental change in the construction industry or is the industry self-correcting to a more sustainable level of employment?

Thomas Vitlo, author of “Hesitation in the Construction Industry,” says that, while overall construction spending has increased since the end of the recession, construction employment has not kept pace.  He based his analysis on the Census Bureau’s “Value of Construction Put in Place Survey” and the Bureau of Labor Statistics “Job Openings and Labor Turnover Survey.  Vitlo used a six-month moving average to iron out the strong seasonality of activity in the construction industry.

In the resulting chart it is clear that, before the Great Recession, the two series were fairly well correlated.  Construction hiring fell as spending declined and rose as spending increased.  Then in early 2010 the two diverged.  Spending fell to a low of 16.8 percent in December 2009 and increased to a peak of 9 percent year-over-year in October 2012.  Total construction hires, however peaked at 14.6 percent in June 2010 and have been decreasing by 8 percent year-over-year as of October 2013.  “Therefore,” Vitlo says, “as spending has generally increased over the past few years, construction hires have declined, averaging only a 1 percent increase since June 2010.”





Coinciding with the shift in the relationship between hiring and spending is a reversal in construction employment.  The BLS employment figures show that in the eight years before the recession construction employment averaged 7.1 million but since September 2008 the average has been 5.8 million.   Even more intriguing, Vitlo says, is the share of employment going to construction.  Pre-recession construction employment averaged 5.1 percent share and it is now 4.1 percent.  After the peak-to-trough decline the share has plateaued for 50 months.

Study: U.S. Has Most of World’s Affordable Marketsm - Key West Real Estate Blogs

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Study: U.S. Has Most of World’s Affordable Markets
The U.S. has the most major markets in the world where buying property is considered affordable, according to the Demographia International Housing Affordability Study, an analysis of 360 cities in nine countries.
Pittsburgh leads the pack in affordability among major cities around the globe. Other affordable major U.S. cities that topped the list were Detroit; Grand Rapids, Mich.; Rochester, N.Y.; Atlanta; Buffalo, N.Y.; Cincinnati; Cleveland; Indianapolis; and St. Louis.
Of the 360 worldwide markets evaluated in the study, 95 were labeled “affordable” (of which 84 were in the U.S.). On the other extreme, 67 metros in the study were labeled “seriously unaffordable markets” (23 in the U.S., led by San Francisco).
The study showed that those who pay the most in the world for housing are often getting the least as far as house size.
“The smallest houses are in the most expensive market (Hong Kong), while the largest houses are in the United States, which has the best major-market housing affordability. (Ireland has the best overall housing affordability),” according to the report.
Source: Demographia International Housing Affordability Study

Key West Real Estate Listings – Nearly Every U.S. City Can Expect a Good 2014

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Nearly every city in the U.S. is expected to see economic growth in 2014, according to a new report by the U.S. Conference of Mayors. The city expected to lead the country in economic growth and job gains is Naples, Fla.

Other large cities expected to see big growth this year: Raleigh, N.C.; Atlanta; and Austin, Texas, according to the report, which was conducted by IHS Global Insight.

Cities that were hit hard by the decline in manufacturing or the housing crisis are also forecasted to see a big turnaround. For example, Youngstown, Ohio, and Buffalo, N.Y., are expected to see economic growth of 1.6 percent and 1.5 percent, respectively.

“The key thing in the northeast was the stabilization of housing,” says Jim Diffley, a senior director at IHS and lead author of the report. “When prices normalized and people weren’t underwater anymore, small but positive job growth has been able to stimulate spending.”

One of the biggest turnaround towns is expected to be Shreveport, La., which, the report shows, will grow by 1.6 percent after a 5.2 percent decrease last year.

Nearly Every U.S. City Can Expect a Good 2014

College towns, such as Austin, Charlottesville, Va., and Lawrence, Kan., are expected to be strong performers this year. However, large urban areas, such as New York, Chicago, and Los Angeles, are expected to grow more slowly than the national average. Diffley says that many large cities such as those have already recovered many of the local jobs that had been lost in the recession, and that’s why they likely will only experience slow growth this year.

Overall, IHS predicts that 340 of 363 metro areas will see their economies grow by at least 1 percent this year. That’s an increase from 183 metros last year. What’s more, 69 of those metros are expected to see growth of 3 percent or more. Only seven of the 363 metro areas will likely not see their economies grow this year, still an improvement over last year’s 97 metros that saw their economies stagnate.

“Two thirds of metros have still not gotten back to 2007 or 2008 peak levels of employment, and half of those won’t get there for another three years,” Diffley says. “Financial crises do not produce normal recessions in the U.S.”

Source: “U.S. mayors: Economy’s gains will spread widely,” USA Today