Tri-Cities employers continue adding jobs in April; unemployment rates at pre-recession levels

Despite the unreliability of the Census Bureau’s unemployment rate data, April’s labor market reports are good news for the Tri-Cities region.

Job creation and employment were positive for the seventh straight month in April according to non-adjusted, preliminary numbers. The trend shows higher more new jobs, higher employment, fewer unemployed people and unemployment rates that match pre-recession benchmarks. Since the numbers a preliminary, they will be some revisions when next month’s reports are released. Those revisions are small. The same can’t be said annual readjustment in the household survey used to compute employment numbers and the unemployment rate.

Employers added 1,700 new non-farm jobs in April. It was also the third month this year job creation in the Johnson City metro area has outperformed Kingsport-Bristol. The long view shows both metro areas are 1,000 non-farm jobs shy of what they were before the recession.

While there’s no argument local employers have added jobs since the recession a brief look at the type jobs created tells a powerful story about the restructuring of the local economy.

There were 3,900 fewer good producing jobs in April than there were in April 2008 while there were 5,000 more service providing jobs. The trend away from good production and the higher-paying jobs that went with it to a service economy began long before the recession, but restructuring since the recession is our focus in this report. So, while employers have created more service providing jobs, only 15 percent of those jobs pay $50,000 a year or more. The bottom line is the economy has produced more low-paying jobs with fewer services.

April’s employment report shows 5,173 more people employed than there were in April last year in the region. The Tri-Cities unemployment rate dropped to 4.1 percent. The flip side is there were 16,472 fewer people employed in April than there were in April 2008.

A word of caution about the employment numbers.

Dr. F. Steb Hipple again points out that the annual revisions of the estimates used for employment in the local labor market are very unstable. “The annual revisions since the Great Recession have usually resulted in drastic changes in the data. The 2015 revision of regional employment growth of 1.5% to -0.4% is only the latest example.” In contrast, the payroll data for nonfarm jobs has remained remarkably stable. “For local decision marking, the wage data has become the only reliable statistical source.”

Here’s an April snapshot of local labor market conditions. Job totals from the payroll report are not available on the county or city levels.

JOHNSON CITY MSA

Unemployment rate 4.1%.

Non-farm jobs – 80,200, up 1.4% from last year.

Employment – 86,430, up 3.1% from last year.

KINGSPORT-BRISTOL MSA

Unemployment rate – 4.1%

Non-farm jobs – 123,000, up 1.8% from last year.

Employment – 132,600, up 2% from last year.

BRISTOL TN

Unemployment rate -4.6%

Employment – 11,230, up 3.3% from last year.

JOHNSON CITY

Unemployment rate – 3.8%.

Employment – 29,880 – up 3.1% from last year.

KINGSPORT

Unemployment rate – 4.3%

Employment – 21,800, up 3.3% from last year.

 

Washington, Carter only counties in Tri-Cities showing growth in latest Census projection

Washington and Carter counties were the only two counties in the Tri-Cities area showing population growth in the Census Bureau projections released today.

Washington County saw an increase of 440 people from July 1 last year while Carter County added 128.

Hawkins and Johnson counties each saw a decrease of 87 people.

Unicoi was down 68.

Sullivan County’s projection was a loss of 12 people.

The statistics released today cover all local functioning governmental units, including incorporated places (like cities and towns), minor civil divisions (such as townships) and consolidated cities (government units for which the functions of an incorporated place and its parent county have merged).

The headline story for Tennessee was Nashville has almost overtaken Memphis as the largest city in the state.

 

Tri-Cities homeowners rank high in Q1 home equity position comparison

When media reports turn to homeowner equity more often than not the focus is on the unfortunates who are seriously underwater. Those are the folks who owe at least 25 percent more than the estimated value of their property.

equity richIt’s one of the indicators used to monitor economic stress in a housing market. But there’s another equity story. One that gets more attention from those interested in the often understated stability – and the economic strength of that stability – of the housing market. I’m talking about homeowners who are equity rich. They have at last 50 percent equity in their home. The only stronger indicator is the share of homes without a mortgage, and Northeast Tennessee ranks high in that metric.

There are a couple of local counties where almost half of all homes have no mortgage, putting them way above the national average. Pinnacle developer Steve Johnson say that was one of the factors Bass Pro looked at before committing to locating in the Tri-Cities. They looked at it because no mortgage – and equity rich for that matter – represents a higher level of, and access to, disposable income.

CaptureTo get a little better handle on households that are equity rich here in Northeast Tennessee look at it this way. For every area homeowner with a seriously underwater mortgage during the first three months of this year, there were three who were equity rich. And the ratio gets bigger on the equity rich side in most local counties.

Nationwide the share of equity-rich homeowners is 22 percent.

Homeowners in all but two area housing markets improved their equity rich positions during the first quarter while the number of seriously underwater mortgages made small changes in three markets.

Those numbers come from RealtyTrac’s Home Equity & Underwater Report. That full report and state comparisons can be found at http://www.realtytrac.com/news/foreclosure-trends/q1-2016-u-s-home-equity-and-underwater-report/

Only two of the nine local markets in the report had a share of mortgages under the national average.  The others had a higher share – some, like Sullivan and Johnson counties, quite a bit higher.

Sullivan County surrendered to Johnson County as the market with the highest equity rich share in the region for the first time in seven quarters.

At the risk of overstating the obvious let’s go back to the share of homes without a mortgage plus equity-rich homeowners to emphasize the wealth issue. Since Sullivan County is one of the largest housing markets I’ll use it as an example. The latest Census data show 48.9 percent the homes are paid for. Of the remaining households, 32.4 percent are equity rich.

Remember that for every one seriously underwater to three equity rich households? In Sullivan County the ratio is one to a little more than five.

A deeper dive into the data can turn up some other gee-whiz factoids. For instance, the two regional areas with the higher per capita disposable income are Colonial Heights. Mount Carmel isn’t far behind, and they are both competitive with some of the outlying counties in the Nashville area where most of the growth in Tennessee is occurring.

The only markets with less share of equity rich property than the national average were Bristol, VA and Washington Co. VA. Those two markets also had a higher share of seriously underwater mortgages.

Report methodology

The RealtyTrac U.S. Home Equity & Underwater report provides counts of residential properties based on several categories of equity — or loan to value (LTV) — at the state, metro and county level, along with the percentage of total residential properties with a mortgage that each equity category represents. The equity/LTV calculation is derived from a combination of record-level open loan data and record-level estimated property value data, and is also matched against record-level foreclosure data to determine foreclosure status for each equity/LTV category.

 

Tri-Cities new home closing begin the year higher; avg. price – avg. mortgage down

Closing on new home sales in the Tri-Cities were up at the beginning of the year when compared to the year before, but the average closing price and average mortgage size tracked by Metrostudy and Builder Magazine were down.

The Johnson City metro area saw the most closings – 111 in the 12-month period ending in January. Last year that market saw 54 new home closing during the 12-month period.

In Kingsport-Bristol, there were 74 closing compared to 58 during the January to January period.

The average sales price in both areas was lower this year. It was $199,284 in Johnson City compared to $215 the year before.

Kingsport-Bristol’s average sales price was $126,500, down from $280,967.

The size of mortgage also declined.

In the Johnson City metro area, it was $140,493, down from $195,178.

In Kingsport-Bristol, it was $83,383, down from $257,905.

New home closings as a share of all home sales were 4% in the Johnson City metro, up from 2% last year. Kingsport-Bristol’s share declined to 1% of the market down from 2% last year.

 

The average closing price per sq. ft. for all home sales – including REO’s – in Johnson City was $76, unchanged from the 2015 average and down from $78 in 2014.

Kingsport-Bristol’s average has been stable at $70 per sq. foot for the past three January reporting periods.

 

 

 

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