State economies

This weekend I was reading a number of articles discussing the current housing situation. While we tend to discuss the housing crisis as a nationwide issue, much of the nation was impacted by the credit restrictions more than anything else. A few areas of the countries were hit either by the loss of industry (Michigan and a few other rust belt areas) or because speculation led to extreme price escalation and overbuilding (California, Florida, Nevada, Arizona).

So what about the rest of the country? Housing has in many areas become more affordable than it has been in years. Unemployment rates are also varied by region with four states having rates below 5% and more than half of the states at rates less than 8%. Eight state have unemployment over 10%, led by Michigan but including California.

These rates are higher than they were two years ago, but for most states they don't approach crisis levels. So, with fairly reasonable levels of employment and lower housing prices, one would expect housing in those states to be stabilized or stabilizing with prices starting to recover. This is exactly what the statistics indicate but because of the tremendous issues in the worst states, the nationwide numbers are not reflective of the improvement in housing.

So, depending on what State you live in, the status of the economy can be very different. This has always been true. However, it seems, when the old Rust Belt States who were losing population and industry were in trouble, while noted in the media it did not garner the same level of attention as when California and Florida saw major hits. Unfortunately, to a large extent both of those States are going to need years to get over the overbuilt housing problem they have, although even within the States, some areas will be better off.