My core economic line for the past 40 years has been that jobs are everything. Period. Jobs drive the economy. When it comes to homes, the only people that buy homes have jobs unless they have gray hair, blue hair or no hair – we call them retirees. And wherever housing sales go, so does the demand for commercial real estate.
Job growth, however, is not uniform across the country. As usual, I invoke the TINSTAANREM axiom — There Is No Such Thing As A National Real Estate Market. Nor is job growth the same nationwide. But where job growth is strong, so is the demand for real estate.
Even within states, job growth varies. I am in New York today, and while the Utica-Rome Metropolitan Statistical Area (MSA) lost 1.87 percent of all their jobs in the 12-month ending March 2018, the Dutchess County-Putnam County MSA grew at a strong 2.71 percent.
Job growth for some areas can be temporary, but for others long-term and systemic. The following data focuses on both the latest 12-month job growth and an index based on job growth rates for the latest 12-months, 2 years, 5 years and 10 years.
From a 12-month perspective, the top-10 markets for job growth (based on percentage increase) are shown in the following table. If you look at the top 50 MSAs and Divisions, there is a recurring theme where job growth is strong: Energy (oil and gas), Manufacturing (no kidding-cheap energy has helped create 232,00 net new jobs in the past 12-months), Technology (not just limited to Silicon Valley), Major College Towns, State Capitals and Destination Places.
As always, for all the winners there are losers. The worst performing jobs MSA and Divisions in the past 12-months are shown in the next table. All of these had a more-than 1.5 percent net job loss in the past 12-months.
For a longer-term perspective, the following table show the rankings for the top-15 best 1-year, 2-year, 5-year and 10-year job growth rates, plus an overall score on which markets have done the best. These are the best long-term job growth markets.
The poorest long-term market performers are shown in the next table. Note that none of these are major population centers.
Jobs are everything. Some places are hot and others not.
If you questions, just reply back.