The AEC Lens
Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick is Chief Economist for ConstructConnect. He is a frequent contributor to the Daily Commercial News and the Journal of Commerce. He has delivered presentations throughout North America on the Canadian, United States and world construction outlooks. A trusted and often-quoted source for … More »
Where Job Prospects are Brightest and Home Ownership is Cheapest
November 6th, 2015 by Alex Carrick, Chief Economist at ConstructConnect
Article source: CMDGroup
Tables 1 and 2 accompanying this Economy at a Glance compare labor markets with home prices in major U.S. and Canadian cities.
The reason for conducting this analysis can be summed up succinctly. It shows where job prospects are brightest while home ownership is cheapest.
The labor market ‘composite’ ranking has been based on an assessment of two criteria: year-over-year employment growth (from fastest to slowest) and unemployment rates (from lowest to highest).
Median or average home prices (and their year-over-year percentage changes) can be found at the web sites of the National Association of Realtors (NAR) and the Canadian Real Estate Association (CREA).
It would be interesting to draw a line connecting every city to its doppelganger in the tables, but that would yield a confusing blizzard. Therefore, only ones in support of this EAAG’s headline are shown.
From the U.S. table, it’s clear that San Jose (2) and San Francisco (5) have strong labor markets that are accompanied by high home prices – i.e., on the right side of the table, they have corresponding rankings of (1) and (2) respectively.
But equally or nearly as buoyant job opportunities in Salt Lake City (1), San Antonio (3) and Austin (4) do not equate with anything like the same high level of accommodation cost – rankings of (14), (29) and (13) respectively.
In fact, San Jose and San Francisco have median single-family home prices in excess of $800,000. Salt Lake City, San Antonio and Austin all have existing home prices below $300,000. That’s a gap of half a million dollars.
Among the next tier of five cities holding out good employment hopes, Indianapolis – ranked (6) in labor but (35) in home prices – is the standout, with Dallas, (tied for 6) compared with (25), and Orlando, (10) versus (30), also showing well.
Moving a little further down the labor section of the chart, Cincinnati, (12) versus (38), Columbus (14) versus (34), and Oklahoma City, (15) versus (37), are worth examining.
A caution is in order. None of this is to suggest you should immediately pack up and move to one of the aforementioned cities. That might lead to a stress disorder based on ‘income shock’.
The same analysis for Canada highlights the benefits, at this time, of living in Quebec City, (2) versus (14), Winnipeg, (tied for 2) versus (13), and maybe Halifax, (8) versus (12).
On the flip side of the coin, where tarnished labor markets sit in uneasy juxtaposition with too-polished home prices, are Los Angeles, Miami and New York.
Those three urban centers, all tied with an employment ranking of (31), are respectively (4), (12) and (6) when listed as to cost of an existing-home purchase.
The labor market ranking is a composite of job growth (fastest to slowest) and the unemployment rate (lowest to highest). When the ranking number is the same, the cities are tied.
Data sources: U.S. Bureau of Labor Statistics and National Association of Realtors (NAR).
Category: CMD Group