2016 was a growth year for Tri-Cities job creation, employment

2016 was a good year for the Tri-Cities labor market. Employers added 2,400 nonfarm jobs despite a steadily decreasing growth rate. Employment and the labor force increased from 2015 totals, and the average annual unemployment rate of 5% was a nine-year low.

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Year-over-year change non-farm jobs and employment

Year-over-year job creation peaked in March at 1.9% then declined every month ending at 0.3% in December. That progression is based on a three-month moving average of Bureau of Labor Statistics non-adjusted, preliminary monthly reports. Since the numbers are preliminary, there’s a slight adjustment in each following month’s report. But those adjustments are minor and don’t change the big picture. The moving average is used to remove some of the seasonal noise from unadjusted job numbers. The long-term trend, based on a 12-month rolling average, shows regional job creation basically flat-lined in July.

Trends data aside, 2016 was a strong labor market growth year. Annual year-over-year gains were the highest in five years. But, the jobs total is still 3,700 shy of the annual pre-recession high. However, that’s not all a factor of job creation. Labor force participation down due to the number of people aging out of the labor force and those who have stopped looking for work.

The annual employment total in the seven-county region was up 5,087 from 2015, and the labor force was up by 3,229. Compared to pre-recession highs, the 2016 labor force was down by slightly more than 19,000 and employment were down 16,121.

December’s non-farm job total was 500 better than December 2015. Employment was 3,859 better than December 2015, and the labor force was up 3,186. The unemployment rate was 5.2%, up 0.3% from November.

JOHNSON CITY MSA

On the metro level job creation in the three-county, Johnson City MSA outperformed the four-county Kingsport-Bristol MSA for the fourth straight month. And the annual year-over-year jobs growth rate was higher than Kingsport-Bristol for the third year in a row.

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Year-over-year change non-farm job

Johnson City’s metro area’s December job creation rate ticked up to 1.2% over December last year, and the preliminary annual average was 1.3% higher than 2015, which was 1.3% better than 2014. Johnson City annual job growth has been up for three straight year and the 2016 total is 500 below the pre-recession benchmark.

The annual average employment total was 2,681 better than 2015, and the labor force was up 1,825. Compared to pre-recession highs last year’s labor force was down 10,286 and employment was down 9,770. Last year’s average unemployment rate was 5.1%, the lowest rate since 2007.

Non-farm jobs in December were 1,200 better than December 2015.

December’s unemployment rate was 5.5%, up 0.4%. Employment was 2,591 more than December 2015, and the labor force was 2,521 higher.

KINGSPORT-BRISTOL MSA

Kingsport-Bristol has seen a longer succession of annual jobs gain that its neighbor to the south, but the increases have not been as strong for the past three years.   On the brighter side, Kingsport-Bristol finished the year with 1,400 more jobs than 2015. The annual total was 800 fewer than the pre-recession high.

Annual average employment was up 2,406 from 2015 and the labor force increased by 1,404. Compared to the pre-recession high the labor force is down 8,837 and employment is 7,417 lower. The 2016 average unemployment rate was 4.9%, the lowest since 2007.

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Annual year-over-year change non-farm jobs

December’s non-farm jobs total was 700 below what it was December 2015. It was the fourth month that the year-over-year comparisons were negative.

December’s unemployment rate was 5.2%, up 0.2%. Employment was 1,268 higher than December last year and the labor force increased by 1,295.

Here’s a capsule look at the 2016 non-adjusted, preliminary average for the area’s three major cities compared to the 2015 annual totals and the December year-over-year indicators.

BRISTOL

2016 average unemployment 5.5%, lowest since 2008

2016 employment, up 321

2016 labor force, up 282

Compared to the pre-recession high 2016 employment was down 884 and the labor force was down 970.

December unemployment rate 5.7%, up 0.6%

December employment, up 249 from December 2015.

December labor force, up 199

JOHNSON CITY

2016 annual average unemployment 5%, the lowest since 2008

2016 employment, up 932

2016 labor force up 568

Compared to the pre-recession high employment is down 1,193 and the labor force is down by 1,700.

December unemployment rate 4.9%, up 0.2%

December employment, up 2,402 from December 2015.

December labor force, up 817

KINGSPORT

Kingsport is the only city in the region where employment and the labor force are higher than they were before the Great Recession.

2016 annual average employment 5.2%, the lowest since 2007

2016 employment, up 622

2016 labor force, up 472

Compared to a 2008 pre-recession benchmark employment is up 3,016 and the labor force is up 3,187.

December unemployment rate 5.5, up 0.1%.

December employment, up 323 from December 2015.

December labor force up 334

 

 

 

 

Johnson City leads lower middle-income Tri-Cities growth; Bristol has largest share of middle-income households

Tri-Cities households have undergone changes in the wake of the Great Recession that may not be as dramatic as reports on the “hollowing out of the middle-class” but are reshaping local demographics.

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For instance: The number of middle-income households has increased by almost 6% since the recession. Most of that growth is in the $50,000 and below range but $50,000-to-$99,999 households also increased.

But before we get into the weeds for more data there’s a distinction that has to be made.

I’m not going to try to define middle-class. Although it’s often used in conjunction with middle-income households, middle-class has no precise meaning. Everyone who uses it understands by their own terms. In reality, it’s more about how people feel about themselves and their lot in life than how much income they have. A common definition is individuals who have a comfortable standard of living, economic security, and rely on their expertise to sustain themselves Depending on the model used, the middle class constitutes anywhere from 25% to 66% of households. And there are subgroups to the middle class, but that’s another story.

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There’s one loose definition that links middle class with household incomes by saying it ranges from 30% above and below the local household median income. That may be a good benchmark, but it sure provides some headaches when using Census data because it doesn’t mesh with the way Census folks use household income data.

Census data groups households by income in 10 line items. For the purposes of this look at that data let’s consider the first three groups as the lower-income range. It begins with less than $10,000 a year and tops out at $24,999 a year.

The middle-income range begins at $25,000 and ends at $99,999. If we use the 30% above-and-below the local household median income to gauge middle-class households these four groups fit the bill in the Tri-Cities. But that doesn’t necessarily mean everyone in those income ranges would say they have a comfortable standard of living and security. This is the demographic range that houses hotbeds of populism that are anti-government and anti-institutions.

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The final household income range begins at $100,000 a year and goes to $200,000 or more.

A comparison of the current Census data to a 2008 pre-recession benchmark shows most of the middle-income household growth came in the second tier of Johnson City’s middle-income households. The number of households in the bottom tier increased in Bristol and Kingsport and declined in Johnson City. Households in the middle-income top tier increased in all three cities with Kingsport claiming the lion’s share. While the number of households in this range increased in Johnson City its share of the total was down due to the city’s population increase.

So, what is the big picture?

According to current Census data the largest share of households in Bristol, Johnson City and Kingsport are in the middle-income range. They account for over half of all households.

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Bristol has the largest share of middle-income households followed by Kingsport then Johnson City.

Johnson City has the distinction of having the largest share of higher and lower-income households.

Two upcoming posts will look at how the share of households in the lower and upper-income ranges have changed in the restructuring from the Great Recession.

 

 

Trump axes FHA premium cut, here’s how much it would have cushioned local FHA loans

As expected President Trump put the brakes on the FHA’s planned mortgage insurance premium reductions.

Even if the reduction has been approved – or it some pro-housing lobbies get it reinstated – it won’t help local buyers as much as the the $446 a year national average projected by the agency.

An analysis of how much the proposed cut would save local buyers by ATTOM Data Solutions show the average FHA buyer in Washington County would save $335 a year while the average Sullivan County buyer would save $290 a year.

The analysis also compares the percentage of wages to makes to make house payments before the reduction and after the reduction.

In Washington County, it was 29.5% before the reduction and 28.6% after.

In Sullivan, it was 20.8% before the reduction and 20.15 after.

For buyers who were looking at a FHA loan and who have a down payment and good credit now is the time to shop for a new lender. They’ll probably end up paying a little more interest since the FHA rates are lower than convention loans.

Buyers who have a credit problem – and some first-time buyers – are probably in the position of going back to square one and going the credit repair route and trying to save enough for a bigger down payment.

“The last FHA premium cut two years ago, helped to trigger a relatively short-term jump in home sales to FHA buyers, who are typically first-time homebuyers without much saved up for a down payment,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Prices of homes backed by FHA loans also accelerated higher in the wake of that last premium cut, although that premium cut occurred concurrently with a drop in mortgage rates, a scenario that is less likely this time around.”

But according to multiple sources, the FHA premium cut, which is scheduled to go into effect on January 27, will be delayed at best by the incoming administration.

 

Local foreclosures filings returned to recession levels during 2016

Although foreclosure activity dropped to a 10-year low on the national level, properties with filings in the Tri-Cities region were back to recession levels in 2016.

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CLICKING ON CHART RENDERS A LARGER VERSION. NE TN foreclosure filings by year. Data Source: ATTOM Data Solutions.

ATTOM Data Solution’s year-end 2016 Foreclosure Market Report shows filings were down 14% from 2015. The situation here was similar. Filings were down 11.8% from 2015, but 2015 filings spiked above pre-recession filings after three years of decline. The level of 2016 filings was on par with 2010, 2011 and 2012 levels.

“The national foreclosure rate stayed within a historically normal range for the third consecutive year in 2016, even as banks continued to clear out legacy foreclosures from the last housing bubble, particularly in the final quarter of the year,” said Daren Blomquist, senior vice president at ATTOM Data Solutions, the new parent company of RealtyTrac. “Foreclosures completed in the fourth quarter had been in the foreclosure process 803 days on average, a substantial jump from the third quarter and indicating that banks pushed through significant numbers of legacy foreclosures during the quarter. Despite that push, we still show that more than half of all active foreclosures nationwide are on loans originated between 2004 and 2008, with a much higher share of legacy foreclosures in some markets.”

The Tri-Cities isn’t alone in its foreclosure position. According to ATTOM’s report foreclosure activity has increased in 12 states and 25% of metro areas.  Many of those are legacy foreclosures originated as far back as 2008.

During 2016 there were 1,243 Northeast Tennessee and 219 SW Virginia properties with a foreclosure filing.

Sullivan and Washington counties in NE Tenn. saw the bulk of the filings since they are the largest markets. In SW Virginia Scott and Lee counties had the dubious distinction have having the highest number of 2016 filings.

Foreclosure sales were not as big a factor during 2016 because until the latter part of the year the bulk were sold at auction on through other sales outlets instead of going to MLS listings. That changed during the last quarter when repossessions (REOs) assumed a leading role.

The volume of foreclosures was also likely a factor in muting the sales price of other property during a period of much tighter inventory of resales on the market.

The December activity report shows repossessions in NE TN was slightly below the December 2015 level as were total filings. SW VA saw the same pattern.

According to ATTOM’s report, there were 95 NE TN foreclosure filing in December and Sullivan County accounted for 43 of them, SW VA saw 26 December filings. Bristol VA and Washington County had the lion’s share.

The ATTOM Data Solutions Year-End U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the ATTOM Data Warehouse during the year. Some foreclosure filings entered into the database during the year may have been recorded in the previous year.

 

 

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