Unemployment – Real Estate Matters
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Unemployment

Commercial Real Estate, Office Real Estate

Minneapolis Unemployment Rate Lowest in the Nation Among Large Metros

The most recent Bureau of Labor Statistics unemployment numbers pegs the Twin Cities’ as the lowest rate in the nation among metros of 1,000,000 people or more. At 4.7% in the May figures, Minneapolis-St. Paul beat out previous-best Oklahoma City. Seattle, Austin, and Birmingham round out the top 5, all at 5.5% unemployment or less. The news led Slate correspondent Matthew Yglesias to repeat his proclamation that “you should move to Minneapolis,” due to its combination of high wages and low cost of living.

The BLS study follows a job report by Cassidy Turley which ranked the Twin Cities as the ninth best job growth market between 2012 and 2013. Between February ’12 and ’13, the Twin Cities added over Continue Reading

Commercial Lending, Commercial Real Estate, Government Policy, Industry News, Minnesota Real Estate Hall of Fame, Real Estate Trends, Upcoming Industry Events, Upcoming UST Events

Why real estate has become a drag on the economy – a year in review.

chartsLast October, Dr. Anthony Downs provided the keynote address at the first annual Minnesota Real Estate Hall of Fame induction ceremony. His address, Why real estate has become a drag on the US economy was a realistic, unvarnished assessment of the issues that our country was facing at the time. He noted that in previous recessions, real estate had often led the way to recovery. Today, however, real estate is a serious drag on our economy’s ability to return to prosperity.

Dr. Downs will return to the University of St. Thomas on October 26 to present the keynote address, “2012 Real Estate Market Update” for the second annual Minnesota Real Estate Hall of Fame induction ceremony. In preparation for this event, I looked back at his presentation from last fall and was surprised by how relevant his address remains today. I thought it would be interesting to revisit his remarks to see how they compare to actual events in the last year. 

Most of the key issues that Dr. Downs mentioned last year are still with us today and many of his predictions have come to pass in the ensuing year. Here are several examples:

Unemployment. Dr. Downs observed “high rates of employment are likely to continue for several more years”. He mentioned consumers will not have the cash to increase spending and small businesses will have little reason to hire more. Related to employment he foresaw “no sudden change in conditions is likely to radically increase the demand for new workers and for new production”. Looking at the national employment rate that has been hovering at just over 9% and the Minnesota rate that has been over 7% since last fall with little prospect of near term improvement, his observations seem to be right on. Continue Reading