New York City, the nation’s largest city with about 8.4 million people, continued to grow steadily. The city’s population expanded 0.5% in 2009, compared with 0.4% a year earlier but down from 0.7% in 2007. The recession has prevented people moving to the suburbs to buy homes. This keeps people in larger cities and draws new ones in. Is this good for large city real estate? We think it is. When pricing is mostly determined by supply and demand, rising demand can only help pricing. While the luxury market stands to benefit most, one cannot help wondering how much ‘affordable’ rental property will be needed over the next 10 years to satisfy demand.
Archive for June, 2010
May unemployment dips to 9.6% from 9.8% in April and the city’s workforce climbs to over 4 million as economy rebounds quickly.
The city continued its rebound in May as the unemployment rate fell for the fifth straight month and the economy posted over-the-year private-sector job gains just nine months after losses had peaked.
The May unemployment rate dipped to 9.6% from 9.8% in April, likely aided by government hiring for the Census, according to a report released Thursday by the state Department of Labor. The state unemployment rate fell to 8.3% from 8.4% a month earlier. The national jobless rate stands at 9.7%.
Also in May, the city’s workforce climbed to 4,001,100, the highest level since at least 1976 and probably the highest level ever, according to Mayor Michael Bloomberg. He called the growth in the labor force “a sign that people from around the state, country and world believe in New York City’s future and are coming here to pursue opportunities.”
The city added 8,000 private-sector jobs in May, not insignificant, though not nearly as robust as the gains of the previous two months, according to an analysis of the DOL data by the Fiscal Policy Institute.
Some 18,000 government jobs were added in May, many of them Census-related. Also, over-the-year private-sector employment rose by 1,300 jobs—the first such increase since December 2008.
“When you look at how fast we moved from very severe over-the-year losses, it was a very dramatic recovery,” said James Brown, principal economist at the Department of Labor. “It usually takes much longer just to break even.”
Indeed, it took just nine months from when over-the-year job losses peaked in August for the city to post gains. By contrast, it took 26 months during the previous recession for the city to post the first positive over-the-year job numbers.
Mr. Brown says one reason for the rapid recovery is that initial cutbacks made by some businesses in the fourth quarter of 2008 and first quarter of 2009 were probably too harsh. “There was a lot of uncertainty and uncertainty causes businesses to stop hiring and trim overhead as fast as they can,” he said. “They may have cut employment more than what they actually needed to.”
Is our economic system too reactionary? Is our economic system too politically driven?
One thing we are certain of: Real estate always benefits by strong employment….
I believe the two thousand and teen years will be the ROLLER COASTER DECADE. Already we are witnessing a volatility that has rarely been seen before in our history, and I fear this is the new normal.
We are seeing vast fluctuations in the Equity Markets, often fueled by our new electronic economy, a system that is more focused on incremental minute technical gains and losses achieved through advanced technology than long term investment strategies.
The quarterly driven thinking and analysis is being replaced by a monthly analysis that results in sweeping conclusions, mostly politically fueled. These ‘conclusions’ become the press stories who are desperately seeking the next headline, and the more dramatic it is, the better.
With everything being averaged, sooner or later it will become evident that all these averages are actually inaccurate and that more specific long term data is indeed more meaningful….but it could take a decade of roller coaster style pain to learn this lesson.
We are in the midst of a technology revolution: this decade will see a vast shift in media (Think how the I-Pad is already replacing 6 newspapers in hotel lobbies!), energy (the BP oil spill will see a huge new focus on clean energy) and the markets in general (banking reform).
Is the Federal Government blind, stupid, or worse, thoroughly corrupt? I suspect its all three.
Why on earth do federal taxes make absolutely ZERO accounting for the cost-of-living in various cities? Is it accurate that $ 250,000.00 earned in Manhattan is the equivilant of earning $ 250,000.00 in Tulsa, Oklahoma or Albany, New York? NO! NO! NO! It does not take much genius to figure that out.
So where is the mass outrage? I think this system is un-constitutional. It’s time to fight back this corrupt system. Where is the press on the LEFT or the RIGHT? Both remain silent. What do you think?