September 4, 2009
U.S. Unemployment At 9.7 Percent, Two Tenths Below San Francisco
"The pace of U.S. job losses slowed in August as signs emerged that the recession is ending, while the unemployment rate reached a 26-year high [9.7%]....A rising jobless rate, stagnant wages and falling home values signal a lack of consumer spending may curb an economic recovery."
∙ U.S. Payroll Losses Slow, Unemployment Rises to 9.7% [Bloomberg]
∙ San Francisco County Unemployment Up To 9.9 Percent In July [SocketSite]
First Published: September 4, 2009 8:15 AM
Comments from "Plugged In" Readers
Let's hear all the SF RE bottom callers chime in with double digit unemployment!
Posted by: J at September 4, 2009 9:19 AM
J, I already called bottom a while back.
Posted by: sparky-b at September 4, 2009 9:22 AM
It's going to be a lonnnng climb back....
Posted by: Rincon Hill Billy at September 4, 2009 9:29 AM
Unemployment bottom in what, 4-5 months?
A sense that the worst is over for employment and the economy is definitely going to halp mitigate the foreclosure pressure on RE pricing. Plus is seems like there are a fair amount of buyers on the sidelines waiting for the best deal. Once there is consensus that prices have bottomed, all buyers are going enter the market.
Finally inventories are low and there just aren't a glut of SF condo projects like there were a year ago. And no new projects are in sight.
Posted by: anon at September 4, 2009 10:44 AM
Yeah, I honestly don't get how home prices are rising with the unemployment this high and expected to continue to rise throughout the rest of 2009. I know that the prices rose a bit this summer, but isn't this seasonality? How is a long-term recovery in the housing sector being supported, especially in the expensive areas of the Bay Area?
Posted by: SFhighrise at September 4, 2009 11:03 AM
"Unemployment bottom in what, 4-5 months?"
That's probably a reasonable estimate. But then we're likely to drag along that bottom for quite some time. Perhaps years. Just because things are no longer getting "worse" is not the same thing as being "good."
And we'll see about that pent-up demand. My read is that whatever significant pent up demand there was has been spent over the last 6 months as sales volume picked up tremendously compared to the last couple of years. Of course, SF did not see that pick-up because prices are still unaffordable here. SF inventories are not low by any measure. Sales, however, are low, except at the low-end price range where the pent up real demand (i.e. buyers willing and able to buy) have been doing so. I don't think you could even call it a dead cat bounce, as prices have continued to decline at all price levels. But the free cash and record low rates have helped slow the declines at the low end.
Posted by: Trip at September 4, 2009 11:03 AM
Anecdotally, my wife and I just got an appraisal for our tiny house in San Bruno and the number came in at $485k (that's $570 psf) -- $40k over what she paid in late 2003.
So the low end hasn't completely cratered just quite yet, although this most recent appraisal was 21% below the last appraisal which occurred in January of 2007.
Posted by: Jimmy (No Longer Bitter) at September 4, 2009 11:38 AM
I fully expect prices to drop during the winter, CA had a tax credit/deduction for buyers that ended recenctly, and the Gov has one that will be ending soon as well. I definitely think the recent good news was in large part due to the tax incentives and seasonality, and will soon reverse when normal market forces pick back up.
I think this winter could be the bottom, but it's also fairly possible the market will continue down for the next year or so.
Posted by: lyqwyd at September 4, 2009 3:51 PM
They generally don't break the numbers down into statistics which matter, which is the fact that the unemployment rate for college graduates is closer to 1.5%.
Posted by: Jimmy C at September 7, 2009 9:39 AM
Jimmy C is right that college graduates -- predictably -- have a much lower unemployment rate. but the official rate for those with a bachelor's degree or higher is 5.2%, up from 3.1% in August '08. Of course the true rate for all classes is significantly higher than the official rate as the latter excludes those who have simply stopped looking out of frustration and those only working part time who would prefer to work full time. The BLS breaks all of this down.
I disagree with Jimmy C that the unemployment rate for college graduate is the only statistic that "matters." The trend for the other 73% of the adult population clearly matters as well.
Posted by: Trip at September 7, 2009 9:51 AM