Utah continues to hold the lead in job creation in the latest data. Idaho and South Carolina are catching up and narrowing the gap. At the opposite end, any state with an exposure to energy production is getting slammed. North Dakota and West Virginia have measurably fewer jobs now compared to one year ago.
It should be no surprise that the states with faster job growth are generally the ones with better real estate performance. Home sales and commercial leasing activity roll along with jobs.
The one-year change provides a good picture of the momentum: better/worse and accelerating/decelerating. It is nonetheless worth noting a longer term trend as well. North Dakota is the worst performer for jobs in the past 12 months but it is the best performer over the past 15 years. Michigan is ranked #11 over the past 12 months but it is the worst performer over the past 15 years.
Another worthy point in the latest job data is the importance of diversification of the local economy. Dallas, used to the most popular TV show many years back with the sleazy oil tycoon J.R. Ewing. Today, Dallas is no longer strictly oil and is creating jobs in insurance, auto parts, and many other industries. Houston by contrast is more oil dependent and the job creations look to be halting in the near future.
As an aside Utah has been in the lead from the beginning of the year. Governor Gary Herbert, a former REALTOR® and a former president of Salt Lake Board of REALTORS® has said his background in real estate has helped formulate right policies for the state economy. It could be his policies or other random economic forces at work. But one unique thing about Utah is that it is dead last in spending on education at only $6,500 per pupil compared to $10,700 U.S. average. Many studies on early childhood education emphasize reading books by parents and the number of vocabulary words exposure as significant determinants of kid’s later educational success. Evidently, there must be a lot of reading going on at home in Utah.
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.