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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

January 5, 2010 at 10:10 AM

Metro areas continued to suffer job losses, and why real estate won’t ever be the same again

Top of the News: Job No. 1 in the recovery continues to be, well, jobs. The federal Bureau of Labor Statistics has compiled metro employment numbers for November, with Kennewick-Pasco-Richland turning in the best jobs performance for the nation: 3,600 jobs added year-over-year.

At the bottom: El Centro, Calif. and Yuma, Ariz., with unemployment of 29.2 and 21.1 percent. Phoenix, capital of low-tax, light-regulation Arizona, lost more than 110,000 jobs, 6 percent of the workforce. Seventeen metros nationwide recorded unemployment of 15 percent or higher. And of course the actual rate is probably much higher, when accounting for discouraged workers and the underemployed.

Seattle unemployment rose to 8.8 percent (166,000 without work), vs. 5.7 percent in November 2008. Longview shot up to 12.9 percent. You can view the entire report here.

The Back Story: The latest tea leaf on real estate is the fall of pending house sales in November, down 16 percent compared with October. Americans still can’t comprehend the sea change that has happened since the bubble burst. The real-estate economy of the early- and mid-2000s simply isn’t coming back.

Prolonged unemployment is only part of the reason. There’s also huge debt, overbuilding, changing buyer tastes. Oh, and every time oil prices keep increasing despite American economic weakness, it is a reminder that further sprawl will be self-defeating — not that we won’t try.

The blog Financial Armageddon has a fascinating report on the crushing uncertainty facing real estate, even among the biggest players. What are they thinking? “Real estate values are down generally 40 percent and there is a huge need for value reset to occur.”; “There are still 2-3 million too many houses in the U.S.”; “This time is really very different than any recession in the past.”; and “The U.S. is no longer the world economic leader and will not lead the world out of this mess.”

It’s a good must-read for Tuesday.

Today’s Econ Haiku:

Kraft wants Cadbury

But Buffett says he won’t bite

Shareholders get chewed

Comments | More in Jobs/Unemployment, Real estate

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