California Unemployment rate dropped to 4.5% in October.

San Diego CA. - I reported the other day in a post titled “Southern California Home Buyers are being Duped!”, that California State Unemployment rates were at 5 year lows and that the media was failing to report this great news…

Well I was wrong. The newest figures are out and California Unemployment rates are at 30 year lows!

San Diego County unemployment rates dropped to 3.6%. The San Diego County unemployment rates have NOT been this low since last December, according to the states Employment Development Department. On a seasonally adjusted basis, California ADDED 9,300 Jobs in October and 17,900 Jobs in September. With 5 of the state’s 11 major industries adding workers last month. Why is this not being reported??? Is it because the media has been saying we are either in or heading for a recession for the last 6 years?  So what is being reported?

What is being reported…

Your Local Paper is probably reporting that California Real Estate is in a downturn. They may be stating that residential construction has slowed and that construction employment is declining rapidly. Well, Last month Construction companies shed only 600 workers.  Remember that the state of California has a population of over 35 million!  For the year Construction employment has fallen by 4,000 workers including 1,200 workers in San Diego County. The newspapers will take great joy in reporting that Nationwide the pace of home building last month slipped to its lowest level in six years (reported Nov 17th by the Commerce Department). Yet, you will almost Never hear that Nonresidential Construction is still doing well both on a National and local level.

Most reports are compared to 2004 stats…

It was reported recently by DQ News.com (Steep Increase in Foreclosure Activity), that California Foreclosures increased by 111% from the third quarter of 2004. It was also reported that lending institutions sent out 26,705 Notice of Defaults in the last quarter compared to only 12,145 NOD’s in the third quarter of 2004. 

Why is using 2004 stats misleading?

2004 was a Crazy year for Real Estate everywhere in the country and definitely here in San Diego County.  In 2004 we had 40 year lows in interest rates.  In 2004, we also has rapid increases in prices (30% appreciation in San Diego County).  In other words 2004 was a Rabid Sellers Market.   

What is a Normal Year like for Foreclosures?  In that same story from DQ News, the reader had to pick apart the article to see that the California state average for NOD’s is 32,653 each quarter going back to 1992 and that the all time high of 59897 NOD’s was in 1996. So, should the article really be titled:

California Notice of Defaults 19% BELOW 14 year average!

Folks, when you compare any normal year to a BOOM year is looks bad!

A Silver Lining on the Real Estate Horizon.

Ok, so we have decreases in unemployment rates, increases in Nonresidential construction (businesses are expanding), interest rates have remained stable, AND NOD’s are 19% BELOW the state quarterly average for the last 19 years… It looks like the economy is doing quite well. So, what is the media’s agenda???

Here’s my prediction…

Now that the Democrats are in control of both the Senate and Congress; we will either hear a lot more bad news and how it is all the Republican Presidents Fault OR we will see a soft landing and the media will trumpet how great a job the Democrats did in turning around the economy.