Typically when you analyze a real estate market or submarket, you start with the macro economic trends. Some of the most common indicators we look at include the Consumer Price Index, Unemployment Rate, and I have added Driver's License Surrenders to our routine survey. Although the exact figures for each are of interest, the trend in those numbers is actually much more important ... are we trending up or down, what does the moving average look like, and how does a local trend compare with a national or regional trend. In this update, I will specifically look at the unemployment rate trend.
Everyone knows that the current trend in unemployment across the country has been upward. Some economists now predict we will see a national average in the double digit rates before we see a decline. This seems to be a contradiction to the mood of the market, which has turned from very pessimistic to increasingly optimistic. Unemployment rates are a lagging indicator and thus we will not see improvement in these figures, until after we see improvement in most other indicators.
In the unemployment chart, it is fairly evident that both Idaho and Washington closely track the national trend. Washington faired poorly during the last recession from late 2000 through late 2003. The significant impact of defense spending cuts signaled substantial layoffs on the west side of the state. Today the Washington and National figures are nearly identical. However, Idaho has been considerably more stable. The precipitous drop in unemployment from 2003 through late 2007, where unemployment dropped to 2.8%, led to an influx of new residents from around the country including a substantial influx into North Idaho in particular (from 2004 through 2008, more than 70% of new residents to the state moved into Kootenai County - more information on this data will be included in the future).
