More jobs and less houses?

2011 finishes with 2 major indexes showing the lowest levels in 3 years for the Portland Metro area.

1. Unemployment = 8.9%.  We have finally broken the 9% floor and continue to move lower.  Dropping 2 tenths of a point from November, after being seasonally adjusted.  The highest level reached was 11.6% in mid 2009 and has been generally declining ever since.
2. Unsold housing supply  = 5.3 months inventory.  This is the lowest level of inventory for the last 3 years reporting. The highest level of inventory was early 2009 and reached near 20 months.  That's almost 2 years supply of homes on the market.  It hasn't been a steady decline the last 2 years.  It's been more like a yo-yo, due to 2 significant tax incentives. These incentives increased buyers activity before those key times, and then were followed with sluggish behavior, until 2011, which appeared to be a steady decline.

We know that buyers have been helping gobble the inventory because low home prices and low interest rates, are making record low monthly payments.  Also, inventory has been held low, as 2011 has shown less foreclosures being taken back by the banks.

But let's be frank.  Without jobs, there is no consumer confidence.  Potential buyers with fear that any day they will be next in the unemployment line, won't be shopping for a house. 

Therefore, it is no coincidence that these 2 indexes are declining hand in hand.  Although, 5.3 months inventory is a great number in the real estate world, 8.9% unemployment is no figure to write home about.  And with economists still threatening that banks are withholding a large number of shadow inventory yet to hit the market, we should still stay on our heels.  But, the clouds are lined with silver now.

Intel means $17 billion to Oregon economy

In 2009, it was estimated that the Hillsboro Intel presence has made an impressive $17 billion impact on the local area economy. 

D1X construction Oct 2011, from Synopsys

A report, produced by Eugene-based research firm ECONorthwest, shows that the chip-maker is responsible for nearly 26 percent of all economic activity in Washington County, almost 10 percent in the Portland area and 5.6 percent statewide. (This report was done well before the announcement that Intel was expanding D1X, adding $3 billion in spending thru 2013) 

Intel may hold its HQ in the San Francisco bay area, however, its largest concentration of employees is right here in the Hillsboro area.  Currently they employ over 15,000 employees over 6 campuses in the Washington County area, just 15 miles West of downtown Portland. 

These are the facts that many people already know.  The study was to show the impact that Intel has on the community.  Other than what's on the payroll and the income taxes spent, how far does Intel's reach span into the area's economy. 

1. Start with consumer spending.  Intel's employees average $117,000 annually.  More than twice the average income in the county.  Intel employees help local retail businesses.
2. Next, for every job created in Intel, another 3.1 jobs are created in another area of the state's economy.  That's just amazing.  Think about that.  If Intel announced, that D1X, the new Fab, will employ another 1000 jobs in the next few years, that's saying, another 3100 jobs, making a total 4,100 new jobs in the area.
3. Housing.  More than half of the Intel employees on the 6 campuses, live in the Beaverton, Hillsboro area.  That's a huge impact on the Washington county.  I'll bet that the other half lives in the 97229, Bethany to Forest Heights area.  Which is another huge affect on Washington County.

It's great news for the area to have such a partner.  But it's always scary to have one company make such an impact too.  Good thing we have Nike.

Oregon Unemployment is down again

Unemployment is down to 9.6% now in Oregon. High number? Yes. On it's way down? Yes. Heading in the opposite direction than the national rate? Yes, again. All signs about the job market have been positive. We are 2 points lower than our peak at 11.6% which was almost 2 years ago in June 2009. And down from 9.9% last month.

It's a pretty diverse job creation too. All sectors were seeing increases. From hospitality to health, and of course tech manufacturing. The only sectors that saw decreases are government and financial.

Jacksonville, Florida. Great Investments.

Jacksonville appears to have suffered less real estate pricing volatility than most Florida markets. The pricing correction has appeared to slow down in its decline, and many submarkets have actually seen small month over month increases. (study by DataQuick 12/08)

Would I say buy? Yes, But, Buy at a discount!

Reasons Jacksonville is different than other markets:

1. Diverse Economy= Government, Military, Distribution, SeaPort, Financial, Manufacturing, Retail Headquarters, Medical and Telecom


2. 7 of the Forbes 1000 are Headquartered in city of Jacksonville. 2nd most in Florida behind Miami


3. 3rd most population growth in Florida from 2006-2007. Above Tampa, Orlando, and Fort Myers.


4. #8 Best Place for Real Estate Bargains. Forbes Magazine 2008


5. #3 Best City in US for Jobs. Forbes Magazine 2007


6. 9.5% Population Growth 2000-2007

Here are some statistical demographics on the area:

1. 12th Largest city in the US. 805,000. 1.5 million in the MSA


2. Median Home Price $175,000


3. Median Household Income $50,000


4. JaxPort (international foreign trade zone) supports 43,000 jobs


5. US Navy supports 35,000


6. Home of Fidelity Nationa Financial Headquarters


7. Home to PGA Tour Headquarters


8. Home to NFL Franchise -- Jaguars


9. Hosted 2005 NFL Superbowl

Many cities of similar size are not considered for an NFL Franchise, let alone considered sufficient to support a Superbowl.

Jacksonville has an economy strong enough to support and attract amenities that some major markets cannot.

Its location on the coast increases the quality of life component, with less fear of the hurricane factor. Jacksonville waters are a cooler temperature than the rest of Florida, and it is located North of the Gulf Stream. No hurricane has come close since approximately 1964, therefore the insurance rates are lower, making this a better cash flow investment than other cities in Fl.

Where to buy in Jacksonville:

• West of the city. East is pricier because it's coastal. The median income is a tad low for the median home prices. To buy conservative, you want to invest where it is most affordable for the majority of home buyers.


• Near the 295 Loop. Most of the jobs are downtown and at the Ports. JaxPort has 3 major locations and the Naval Bases have two. Commute to all 3 job sectors is best near this major arterial freeway.

Property Profile:

Remodeled Foreclosures, allow you to purchase at discount, without the headache of repairs, extra liens on title, and large capital investments. Companies, NorthPoint, can help find the safest investment, complete with improvements and with tenants already in place.

Be ahead of the curve.

Steve@NorthPointGroup.com
503-213-3550
rushsteve1 @ skype
http://www.linkedin.com/in/steveroesch