Phoenix MLS Predicting Lowest Median September Price in Nine Years (Miami: foreclosed, to rent)

[Ponderosa]

Originally Posted by OnYourSide

Another factor of influence, is that Arizona has the 49th worst unemployment insurance benefit amount, at a maximum of $240 a week. This lowers the utilization rate, as many people deem it to not be worthy to file, and then they don't show up in the unemployment numbers.

The number of people receiving unemployment insurance payments has NOTHING to do with the unemployment numbers. The number comes from a household survey.

[azjack]

"The number of people receiving unemployment insurance payments has NOTHING to do with the unemployment numbers. The number comes from a household survey."

Both numbers are relevant to the big picture. But you are right, the Labor Department's formula uses the Household Survey to determine the percentage of the labor force that is not employed. I misunderstood this in the past myself.

From the BLS website:

"Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Persons who were not working and were waiting to be recalled to a job from which they had been temporarily laid off are also included as unemployed. Receiving benefits from the Unemployment Insurance (UI) program has no bearing on whether a person is classified as unemployed."

Labor Force Characteristics (CPS)

[OnYourSide]

Originally Posted by Ponderosa

The number of people receiving unemployment insurance payments has NOTHING to do with the unemployment numbers. The number comes from a household survey.

I am surprised at this statement. I wonder why they even take the survey at all, if some such as you, believe it is useless.

[Ponderosa]

Originally Posted by OnYourSide

I am surprised at this statement. I wonder why they even take the survey at all, if some such as you, believe it is useless.

I did not say the survey was useless. You suggested the numbers were skewed because people won't bother applying for the low unemployment comp in Az when, in fact, unemployment compensation is not a factor in the number. That was wrong and it was useless. Most of your comments can be put in the same bucket - a lot of anti-AZ garbage wrapped in a layer of fluff.

[OnYourSide]

Originally Posted by Ponderosa

I did not say the survey was useless. Your statement that the numbers were skewed because people won't bother applying for unemployment in Az when, in fact, unemployment compensation is not a factor in the number, was useless. Most of your comments can be put in the same bucket - a lot of anti-AZ garbage wrapped in a layer of fluff.

Did not mean to offend you, in inquiring why economists conduct the survey in the first place. Arizona's UI utilization rate is one of the lowest in the nation however. I'm not sure how you know unemployment compensation is not a factor, when Nevada, New Mexico, California, and Utah all have much higher compensation and higher utilizaton rates.

[Ponderosa]

Originally Posted by OnYourSide

Did not mean to offend you, in inquiring why economists conduct the survey in the first place. Arizona's UI utilization rate is one of the lowest in the nation however. I'm not sure how you know unemployment compensation is not a factor, when Nevada, New Mexico, California, and Utah all have much higher compensation and higher utilizaton rates.

Ugh.. See azjack's post above. The numbers are based entirely on a household survey. They call people on the phone. People say whether they are employed or not, whether they are looking for jobs etc. It has nothing to do with how many are receiving compensation payments in this state or any other one.

How useful is it? Since the methodology is consistent it can be useful for comparision. But due to the nature of the questions, some odd results can come during times of transition. For example, we may soon see a rise in unemployment in the survey even as the number of jobs and employed persons is increasing. This is because so called discouraged workers see things improving and decide to go look for a job again, but don't find one. Discouraged workers do not count in the unemployment number - only people who tell the survey taker that they are looking for a job. I think that the numbers are best used but in combination with other measures of employment including the employer survey and even state UI rolls. But the media puts a large emphasis on the household survey number and it is what most are familiar with.

[MN-Born-n-Raised]

Originally Posted by Ponderosa

Ugh.. See azjack's post above. The numbers are based entirely on a household survey. They call people on the phone. People say whether they are employed or not, whether they are looking for jobs etc. It has nothing to do with how many are receiving compensation payments in this state or any other one.

How useful is it? Since the methodology is consistent it can be useful for comparision. But due to the nature of the questions, some odd results can come during times of transition. For example, we may soon see a rise in unemployment in the survey even as the number of jobs and employed persons is increasing. This is because so called discouraged workers see things improving and decide to go look for a job again, but don't find one. Discouraged workers do not count in the unemployment number - only people who tell the survey taker that they are looking for a job. I think that the numbers are best used but in combination with other measures of employment including the employer survey and even state UI rolls. But the media puts a large emphasis on the household survey number and it is what most are familiar with.

Thanks for that explanation Ponderosa. I didn't think about it that way before!

[MN-Born-n-Raised]

I would agree that no one really knows for sure what is going to happen with the property values. If you would have asked me last March 2009 if the values would go up in many parts of Phoenix I'd say no way!!

But many foreclosures got mopped up like in Goodyear North of 10 as well as parts of Surprise. Heck. Even El Mirage got bought up. If I had to place a bet, I'd put money that it will soften in the majority of the areas and at least some of the gains will be given back. The logic is simple. Week jobs and lots of folks walking from their homes. A lot of those homes that were bought will be coming back on the market too.

Since the bulk of BofA loans are government backed, they don’t have to be logical on when they release them. If a bank really owned all of those 12,000 notes then I think we could more easily predict that there would be pricing decreases.

I’m in the market to buy a home in Goodyear but I am waiting on the side lines to see what happens.


People are not as interested in researching homes in AZ (as represented by google searches on "Arizona Homes"). See http://www.google.com/trends?q=arizona+homes&ctab=0&geo=all&date=all&sor t=0 (scroll to the right to see later dates).

Last time the government tax credit changed the direction of the momentium and people jumped on as fast as they could. I'm not so sure that it would next time.

[OnYourSide]

Much has to do with the job market, and with Arizona's 8th worst U-6 unemployment rate in the country things do not look well. The government is also tightening up incentives for housing, which was a major driver in the past year. For us taxpayers, we can be thankful they won't be using this method for much longer.

Arizona Republic's 10% drop in Phoenix values seems optimistic at this point.

[Ritchie_az]

and with Arizona's 8th worst U-6 unemployment rate in the country things do not look well.

I wish this nonsense would stop getting thrown around. Arizona is ranked 33rd in unemployment, tied with NJ. The U-6 includes "under-employed". What is "under-employed"? How many "under-employed" people have mortgages? Of those, how many aren't making enough to pay it? Those are important factors to consider when talking about U-6. It's likely that 90%+ of "under-employed" folks are either renters or are providing a second income to a household. In other words, U-6's impact on the Phoenix housing market is minimal.