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Does length of unemployment indicate the real estate sector’s health?

Why jobs matter to real estate

For anyone who has read Fred Glick’s articles here on AG or listened to him for more than 30 seconds on CNBC, you know that he has been yelling from the mountaintops that our economy, therefore the real estate sector, will not recover until the employment rate is significantly improved.

How unemployment has changed since 2009

Recently, America has experienced record levels of long-term unemployment. According to the Economic Policy Institute (EPI), “In April, the median length of unemployment in the United States was 21.6 weeks, up from 15.1 weeks in 2009 and well over double the median unemployment spell of 8.4 weeks at the start of the recession in December 2007.”

Job searches took the longest in Michigan and South Carolina (19.4 weeks), followed by Florida (18.1 weeks), and Rhode Island (17.0 weeks) while Alaska, North Dakota, and Wyoming enjoyed the shortest median length of unemployment at roughly eight weeks.

The EPI reminds us that “while the median duration of unemployment represents the typical job search, it also means that the wait is longer for half of all unemployed workers.”

Unemployment and real estate

As people wait to regain employment, so does the real estate industry wait for their transacting. No job means no loan means no real estate transaction, so unemployment is certainly a leading real estate health indicator. With the median length of unemployment on the rise so dramatically, while other signs point to stability in the housing market, this will likely be the biggest obstacle to a full recovery.

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Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.



  1. Jim Garrett

    June 6, 2010 at 9:44 am

    Excellent article. There is little doubt that commercial real estate will continue to suffer from sluggish employment figures. If real employment started today, some experts believe that it will 24 months before it translates into corporate expansion requirements. Other experts believe that we currently have 10 million jobs worth of excess space on the market. Even under some of the best conditions in which the economy adds 250,000 jobs per month, it could spell a recovery period pushing 48 months. This doesn’t factor in any new legislation or taxes such as Cap and Trade or an increase in capital gains taxes. Both of which would crush any possible recovery.

  2. Dunes

    June 7, 2010 at 10:41 pm

    Just curious..Isn’t the unemployment problem one that has many sides that effect the impact…For example….Isn’t it jobs and income, in other words the jobs need to provide an income that can be used to Finance so just adding jobs isn’t what’s needed, it’s jobs with a income large enough to Buy.

    Also even if TOMORROW 10,000,000 people went to work at jobs with incomes large enough to qualify to buy how long would Lenders wait or be required to wait before considering them eligible to Loan too? (Would that be the 24 months mentioned)

    Anyway I just asking isn’t it Jobs+income and not just jobs? (You can have 10,000,000 available jobs but if they are all minimum wage or low-income jobs?)

    • Lani Rosales

      June 7, 2010 at 11:11 pm

      Dunes, I totally agree… this isn’t Hoover’s New Deal where the government can get people into manual labor roles and men will ship off and send money home to their wives. For endless reasons, it just won’t work this go ’round, so you’re right, it’s not just about jobs but that IS the first step… then, a full recovery will come when those incomes come back.

      Most people in traditional jobs that I know haven’t seen a cost of living wage increase in years, yet their cost of living has increased, so you’re right — we’ve got a long way to go, and shortening the length of unemployment is step one.

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