Category Archives: Unemployment

Reno Makes another Worst of List

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Here’s another “best of”, “worst of” list and Reno wins another prize. It may not be the prize that Reno would like on its resume although it’s not necessarily our fault. It is not just a story about Reno or Northern Nevada. This is an American problem, and I believe it was completely caused by politicians.

This is a list from 24/7 Wall St. of 9 cities that the article claims were nearly destroyed by the recession. Reno was scored in second place.

2. Reno-Sparks, NV
> Pct. jobs recovered: 1.6%
> Q4 2012 jobs: 187,600
> Pre-recession jobs peak: 225,200
> Recession jobs trough: 187,000
> Pct. jobs lost: 16.9%

Between 2007 and 2010, the median home value in Reno-Sparks, Nevada declined 37.4%, the 13th biggest drop in the country among metro areas. The problems of the recession have plagued states in the southwest, which once had booming housing markets, arguably more than any other part in the country. From the beginning of 2007 to the third quarter of this year, jobs are projected to decline by 38,200, or 16.9% of the workforce. And according to the report, only 600 jobs, a mere 1.6%, will be recovered by the end of the year.

Read more: http://247wallst.com/2012/01/19/the-nin-cities-that-havent-recovered-from-the-recession/

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Unemployed Borrowers Get Break from Fannie Mae

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New guidelines from Fannie Mae followed similar guidelines from Freddie Mac on forbearance for homeowners that are unemployed and facing foreclosure. The loan servicer can grant six months forbearance without the GSE’s approval.

If the borrower is still unemployed Fannie Mae can approve an additional six months forbearance. After that the lender and borrower must consider other options.

The borrower is expected to repay the lost payments over a longer period. But in reality, in many cases the forbearance would simply amount to one year free rent.

This follows a similar program last summer for FHA loans and loan modifications.

Read more: http://www.nytimes.com/2012/01/12/business/unemployed-mortgage-holders-get-payment-extension.html

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Mortgage Interest Rates at Record Low

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The rate on the 30-year fixed mortgage reached a new record low of 3.91 percent. This marks the third new low this year. The 15-year fixed mortgage rate, remained unchanged at a low of 3.21 percent.

The exceptionally low rates and the depressed prices have created a superb buying opportunity, but the opportunity is lost for many potential buyers because of the difficulty qualifying for new loans.

With so many homes underwater here in Reno and Sparks very few homeowners can qualify for a re-finance. Additionally, Nevada’s real unemployment further reduces the chances to re-finance.

Read more: http://www.businessweek.com/ap/financialnews/D9RPKO100.htm

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Nevada Ranks # 46 in List of Best Run States

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Here’s another one of the “Best of” and “Worst of” lists that must fill journalists need for “product.” This time it is ranking the best of and the worst of the 50 states according to their arbitrary opinion.
These are the same kinds of lists that the politicians and the activist refer to when they seek to further pick the pockets of the public. Notice that they don’t include the per capita taxes the states collect.

FWIW, Nevada ranks #46 on the list:

46. Nevada
> State debt per capita: $1,690 (6th lowest)
> Pct. without health insurance: 22.6% (2nd highest)
> Pct. below poverty line: 13.0% (24th lowest)
> Unemployment: 13.4% (the highest)

Nevada has dropped five places in our rankings. This drop is due primarily to its credit downgrade this year from AA+ to AA. Surprisingly, the state has one of the lowest debts per capita in the country, at just $1,690 per person. However, it has other financial woes that make it a long-term risk. Nevada properties declined 44.5% in value between 2006 and 2010, the worst decline in the country. In October alone, one in every 180 homes was foreclosed upon, easily the worst rate in the country. The state also has the second lowest percentage of residents covered by health insurance and the highest unemployment rate in the country.

California ranks the worst, # 50, but you probably already knew that.

Read more (To save you time, Nevada is on page #6.).

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Zillow: U.S. Housing Value Dropped 1.7 Trillion in 2010

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Zillow estimates that US housing values experienced substantial gains earlier in the year, they have dropped approximately $1.7 trillion this year. The drop is 63% greater that the $1.0 trillion drop in 2009. Zillow further estimates that US housing has lost more that $9 trillion since the peak in 2006. Some of the gains early in the year were due to the tax credit and are no longer available.

Even though this is the nationwide averages, some areas have fared better, or worse than other areas. For example, Boston and San Diego have seen a price increase this year. I do not have the statistics for Reno or Nevada at this time. Also different market segments tend to move at different times.

The Reno economy has been extremely hard hit. Jobs are scarce. No matter what the government would want you to believe.  Foreclosures and short sales are pervasive.  Many over-encumbered homeowners are simply walking away. The homeowners that would normally want to upgrade have little or no equity remaining and can’t move.

Zillow thinks that we will finally hit bottom sometime in 2011 and that it may take 3 to 5 years before we see normal appreciation again.

Read the rest here.

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Graphics of the Recession

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Here is a graphical representation of the progression of the recession.  You can see similar graphics displaying bank failures.

This graphic provides a good representation of unemployment and this video likewise shows unemployment over time.

Notice where the majority concentration of the problems are found.  This data suggests to me that the economy still has a long, long way to go.

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