A job is virtually guaranteed in Midland (Texas), Lincoln (Nebraska), and Ames (Iowa), where the unemployment rate is under 3 percent.
The unemployment rate can be misleading about the health of the local economy at times. If, for example, many people including the jobless left the area then the unemployment rate can fall since very few are around looking for work. It would be better to see how many jobs are being created locally. Job creation may attract some unemployed to the area in search of work, but at least we know that jobs are being created and thereby expanding the pool of potential homebuyers. Commercial leasing activity would also correlate with the rise in employment.
Job gains have been accelerating recently in many metro markets. Nationwide, 3.3 million net new jobs were added in the past 12 months. That is the fastest 12-month pace for the country as a whole in nearly a decade.
At the state level, North Dakota and Utah were leading the way. But North Dakota is losing steam, with a job growth rate of 4.5 percent in the latest versus above 5 percent in the prior months. Texas is near the top but is also losing energy as the job creation clocked-in at 3.5 percent rather than the above 4 percent in the recent prior months. The collapse in the oil price will continue to impact jobs in North Dakota and Texas. Utah, with much less exposure to the oil sector, will therefore soon reach the top.
At the bottom were Maine and West Virginia. Even so, these states are creating jobs, though not as strong as other states. That means that all states are steadily building the source of housing demand and commercial leasing will most likely rise.
Among the metro markets, the job winners over the past 12 months are shown below. Several beach towns and college towns are on the list with 4 percent or higher one-year job creation rate. The residual impact from high oil prices of early last year also is still showing up in the local oil-based economies. Here is the list of high flyers.
For investment, buy a condo at one of the above beach or college towns. If you cannot rent it out to one of the recent job hires, then at least you can use for leisure or rent it out to one of the ever rising number of college students.
Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.