February 24, 2012

'Severely' overburdened homeowners, renters

How many people spend more than half their income on housing costs? More than you might think.

In the Baltimore area, one in five households with workers pulling down middle-income or lower-income wages fell into that pinched group in 2010, according to a new report by the Center for Housing Policy. That's nearly 85,000 households "severely burdened by their housing costs."

But it's not quite as bad as the nation overall, with nearly one in four of what the center dubs "working households" falling into that category.

The center, which looked at regions and states across the country, considered all renter and owner households with adults who made no more than 20 percent over their area's median income and worked at least 20 hours a week on average in 2010. That means retirees weren't part of the calculation -- and neither were those who were out of work or had their weekly hours cut below 20, a situation that plenty of Americans were stuck in that year.

Continue reading "'Severely' overburdened homeowners, renters" »

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (2)
Categories: Affordable housing, Housing stats, Renting, The economy

February 14, 2012

Company town

Pete from Highlandtown, one of my favorite commenters here (though I love you all), touched on a subject this week that everyone in the region should be giving some hard thought about: Are we a company town? And if so, are we going to go the way that all company towns eventually do?

"In my opinion, much of the 1995-2008 gentrification in Canton/Fed Hill/etc., was due to our proximity to DC," said Pete, who sees neighborhood change at an up-close-and-personal level doing interior demolition and basement excavations for rehabbers. "Im sure that most of your readers know people that commute to DC (or its suburbs) every day. In many ways we have become a suburb of DC. There is nothing wrong with using our proximity to DC to our advantage. But we are very vulnerable to gas price increases, and Federal Budget cuts."

He's sure that if Washington wasn't carved out of Maryland and Virginia in the 18th century, Baltimore's situation would be much more dire, and he's worried about the outcome when the spiraling federal deficit is finally attacked in a real way. He's hardly alone.

Continue reading "Company town" »

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (0)
Categories: The economy

January 27, 2011

Readers respond to Laurel resident's plight

Last weekend I wrote about the rough economy's effect on unemployed workers ages 50 and up, who are having an especially rotten time finding a new job. A growing number are at the brink of homelessness.

One, Laurel resident Kathleen Harwell, 59, has searched for nearly two years to replace her eliminated administrative-assistant position. Unemployment benefits exhausted and too young for Social Security, she was about to be evicted from her mobile-home community.

She owns her house outright but had fallen several months behind on the rent for her land. Her management company warned her in December that it would move to auction it to pay the arrears if she couldn't pay up by mid-January. "I'm out of luck unless a miracle happens," she said last week.

Readers took that as a call to action. Several sent checks to Harwell, made out to the company, that collectively paid off the $2,100 in arrears as well as her February rent. That buys her a month to keep searching for a job or another alternative to life in a shelter.

Some of the people donating money are in that 50-plus age group and felt fortunate that they were doing all right. One woman, a retiree, felt a connection based on background: "I was an administrative assistant for many years," she told me.

Continue reading "Readers respond to Laurel resident's plight" »

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (3)
Categories: Homelessness, The economy

November 30, 2010

Federal belt-tightening about to hit home

What's the biggest game in town? The federal government. Which is why President Obama's proposal to freeze federal employees' salaries for two years sent shivers down the backs of state budget analysts -- and why locals should pay attention.

Economists have been warning Maryland that the mounting federal deficit would eventually hit home. The state has disproportionately benefited from federal spending, which means disproportionate pain from freezes or cuts.

In the same vein: Defense Secretary Robert M. Gates's declaration earlier this year that the military needs to rein in spending -- including contracting, a big part of Maryland's economy.

As Richard Clinch of the University of Baltimore notes, salary freezes won't hurt as much as layoffs, but they will be a drag on economic recovery. (People tend to buy less if their wages stagnate. That includes houses -- which is why you're reading about this on a real estate blog.)

Economist Anirban Basu thinks state officials shouldn't say "whew, glad it wasn't layoffs" and move on to other problems. He figures federal job cuts are eventually inevitable. Now, he argues, is the time for the state to work on becoming less of a company town by bulking up its private sector.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (12)
Categories: The economy

September 1, 2010

The federal spending effect on Md.

Why is Maryland's jobs picture better than most other states? A certain city to the south of us is a big part of the reason.

A new Census Bureau report offers a reminder of just how key federal spending is here. Federal funds earmarked for contracting work in Maryland last fiscal year topped $34 billion -- a 35 percent increase from a year earlier.

If we're a company town at all, that company is Uncle Sam Inc.

Jobs are a variable in the housing-market equation, so it makes sense to pay attention to the federal effect if you're trying to figure out what will happen to home sales.

On the one hand, there's BRAC -- the base realignment and closure effort -- bringing jobs to the area. And not just the jobs relocating from out of state. "Four military bases in Maryland are all getting hundreds of millions of dollars in construction spending," said Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute.

On the other hand, there's the sky-high budget deficit putting a cap on future growth. The Department of Defense, a major source of contracting dollars in Maryland, is promising to tighten its belt.

Clinch has long warned that the federal government can't continue spending at the pace it has, and that Maryland will feel the effects when that change comes. We might be getting to that point.

Do you think BRAC will outweigh any slowdowns or cuts to federal spending in Maryland?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (7)
Categories: The economy

March 14, 2010

Fighting the foreclosure fight -- or withdrawing

Turning back foreclosure blight has not proved an easy task. Government and nonprofit leaders are hoping a "neighborhood stabilization boot camp" -- which kicks off today at Harvard University with officials from a dozen regions, including Baltimore -- will help improve the response.

The goals include brainstorming new strategies and sharing "game-changing solutions" that can more speedily get vacant homes re-occupied.

The event -- sponsored by Living Cities, HUD and the Ash Center for Democratic Governance and Innovation at the John F. Kennedy School at Harvard University -- is interesting in part because it's not simply bringing together local government administrators. Each place represented (described as "12 of the regions hit hardest by the housing crisis," from South Florida to Los Angeles) sent a team made up of nonprofits and real estate firms as well as government officials.

Detroit -- exceedingly hard-hit -- is not on the list. But leaders there are considering a doozy of a game-changer.

Razing. Razing across the board.

As the Associated Press notes:

After decades of decline that gutted many once-vibrant neighborhoods, Detroit is preparing a radical renewal effort on a scale never attempted in this country: returning a large swath of the city to fields or farmland, much like it was in the middle of the 19th century. Under plans now being refined, demolition crews would move through the most desolate and decayed areas of urban Detroit with building-chomping excavators, reducing houses to rubble.

Tearing down en masse has been suggested in Baltimore, too. Though the city's situation is not as desperate as Detroit's, it has thousands of long-vacant, abandoned houses, and streets where boarded-up properties outnumber the occupied ones.

Continue reading "Fighting the foreclosure fight -- or withdrawing" »

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (3)
Categories: The economy, The foreclosure mess

February 25, 2010

Underwater Md. homeowners

Pick four mortgaged homeowners at random in Maryland, and chances are that one of them owes more on his or her loan than the home is worth. Twenty-three percent -- very close to one in four -- are in that "underwater" state, according to a new report from First American CoreLogic.

That's higher than all but seven other states. (We've been high up the list for a while, alas.)

Underwater is a lousy place to be. If you need a bigger place, a smaller place, a place in another state where your employer is transferring you, etc., you'll need to bring money to the table -- or become a landlord -- to move on. If you're trying to move because you can't afford your mortgage payments, escaping foreclosure involves an often tortuous process of trying to get your lender to approve a short sale.

If you're not planning on going anywhere and can afford your mortgage payments, then an underwater mortgage could be nothing more than an annoyance. But get too far upside down, and some homeowners will walk, economists note.

"Negative equity is a significant drag on both the housing market and on economic growth. It is driving foreclosures and decreasing mobility for millions of homeowners," Mark Fleming, chief economist with First American CoreLogic, said in a statement. "Since we expect home prices to slightly increase during 2010, negative equity will remain the dominant issue in the housing and mortgage markets for some time to come."

One bit of good-ish news: The underwater problem isn't quite as bad in the Baltimore area as it is statewide. Just under 17 percent of Baltimore metro area homeowners with mortgages are upside down.

The state that's worst off is Nevada, where First American CoreLogic estimates that a whopping 70 percent of borrowers owe more than their homes are worth. Where do you stand?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (8)
Categories: Mortgages, The economy, The foreclosure mess

February 4, 2010

Relocating for a job in today's market

Trying to sell a home is stressful. Going out of state to take a new job is stressful. Add the two together in this market, and yikes -- not for the faint of heart.

It will probably come as no surprise, then, that a survey shows a record low percentage of job seekers relocating for new positions. Just over 7 percent of people taking jobs in the fourth quarter were changing towns to do so, according to outplacement consulting firm Challenger, Gray & Christmas.

The survey of about 3,000 workers dates back to 1986.

Even without tough times, the share has been dropping. In the late '80s, more than 30 percent of new hires were relocating, the survey suggests.

John A. Challenger, the firm's CEO, attributed this to baby boomers no longer interested in moving up the corporate ladder by actually moving, and younger workers who are less likely to crisscross the country for jobs than the boomers used to be.

"This could present some challenges for recruiters as the economy improves," he said in a statement. "Companies will have to depend more on their local talent pool."

I'm sure the local talent pool -- especially the parts of it without steady work at the moment -- wouldn't mind. 

Have you relocated or are you relocating? How did you figure out where to live?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (7)
Categories: The economy

December 17, 2009

Holiday black humor

The housing slump, foreclosure crisis and constricted economy are omnipresent even -- or perhaps especially -- at this time of year, so I suppose I shouldn't be surprised about the Recession Gingerbread or the Default Carol.

The former is the brainchild of an artist who put together "Abandoned Gingerbread House Building Sites" in honor of all the abandoned actual homebuilding sites in Ireland. (You can find them in the U.S., too.) As gingerbread creator Andrew Salomone put it, they're "picturesque gingerbread-house decorations that will rot and eventually be thrown out much like the unfinished housing estates themselves." Joy to the world ...

Which brings us to "The 12 Months of Default." It warps "The Twelve Days of Christmas" to tell the tale of a couple sliding into foreclosure. ("On the 12th month of default, my true love said to me ... House sold at auction ... We need to vacate ... Cash for keys offer!" etc. etc.) It has, in a manner of speaking, a happy ending. Depending on your definition of happy.

Tip of the hat to fellow reporter and Consuming Interests blogger Liz F. Kay for noticing the gingerbread, and to Wonk reader Frank Rizzo for pointing me toward the carol.

Update: Marcy Shaffer suggests you check out her company's commercial real estate parody of "O Christmas Tree" ("You used to earn on cruise control" / "Now it's your turn to lose control").

Later this morning: a more upbeat way in which housing and the holidays intersect.

Posted by Jamie Smith Hopkins at 6:30 AM | | Comments (0)
Categories: Housing humor, The economy, The foreclosure mess

November 14, 2009

'Fiscal Haiku': a poetic outlet

Frustrated about the national debt or the state of your own bank account? You could write a thousand-word rant. Or you could write 17 syllables.

That's what the website Fiscal Haiku invites you to do, namely "express your thoughts and concerns about the state of America's finances in the form of this most ancient and concise of international literary forms." Haiku, or at least the version as most of us know it, is three lines of five, seven and five syllables.

Fiscal Haiku is on Twitter, too.

Here's a housing haiku from a San Diego woman:

Home values are down

Foreclosures are plentiful

I still cannot Buy

I see some Maryland submissions, though none from Baltimore. Here's one from a Greenbelt man:

Work'd for fifty years

401(k), zero K

Work for fifty more

And by a D.C. 'burbs guy:

Lament of the wind -

"Don't spend money you don't have."

"You bloody idjits."

Got one? Share!

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (0)
Categories: The economy

September 19, 2009

When 7.2% unemployment looks good

When does 7.2 percent unemployment look good in Maryland? When it marks the end of -- or at least a pause in -- a rapidly worsening job situation. August was the fourth straight month of 7.2 percent, according to new Labor Department estimates. The rate ratcheted up to that point from 4.5 percent a year ago.

There's been a lot of chatter about the "R" word this week because Federal Reserve Chairman Ben Bernanke, in a Q&A after a speech, said he thinks the recession is likely over. A majority of you disagree -- or at least 60 percent of you who took the poll that was part of Friday's live chat.

I took a look at Bernanke's remarks, and they're hardly "happy days are here again." He cautions that job growth probably won't be any great shakes next year, saying that most forecasters think the "pace of growth in 2010 will be moderate, less than you might expect given the depth of the recession":

And the arithmetic is that unless the economy grows, you know, significantly faster than its longer term growth rate, it’ll be relatively slow in creating jobs over and above those needed to employ people coming into the labor force, and therefore, the unemployment rate would tend to come down quite slowly. So that’s a risk, that’s a possibility.

The health of the housing market is influenced by the ease with which people can get and keep jobs. (Obviously there's a housing connection, or I wouldn't be blogging about it.)

But sometimes it's the loss of a job that prompts someone to buy a house.

Continue reading "When 7.2% unemployment looks good" »

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (3)
Categories: The economy

September 15, 2009

How Baltimore stacks up

If you like to know how we compare with the rest of the nation, the Brookings Institution's Metropolitan Policy Program has just the report for you: It ranks the 100 largest metro areas on economic and housing-market measures of health.

I wrote a story for today's paper about the economic stats -- we're 18th best, for instance, as measured by the recent change in employment. (As in, it's not as bad here as it is in 82 other places. Woohoo!) The Baltimore metro area was in or near the top quarter of metro areas on most of the economic measurements.

But what about the housing stats? Those are a different story.

Our 5.8 percent drop in home prices in the spring, compared with a year earlier, ranked us 73rd out of 100. (With 100 being worst, at least from a homeowner point of view.)

The metro area was 61st out of 100 for its share of bank-owned homes -- 2.84 for every 1,000 mortgageable properties. (The average for all metro areas was higher, but only because some big regions are so hard hit.) These homes, which were foreclosed on and taken back by lenders, are typically called "REOs" for "real estate owned."

Baltimore's worst ranking on the report: Measured by the change in bank-owned properties from the first quarter of the year to the second quarter, it was 83rd out of 100.

Continue reading "How Baltimore stacks up" »

Posted by Jamie Smith Hopkins at 9:41 AM | | Comments (5)
Categories: Housing stats, The economy, The foreclosure mess

August 22, 2009

Good news -- possibly

What's the most important thing a home buyer needs? A job -- which is why anyone interested in the fate of the housing market will be equally interested to know that Maryland employers created 10,000 jobs last month.

Well -- sort of.

Stay with me here.

As it often the case with economic surveys, the Labor Department figure comes with asterisks. The number is preliminary and could be revised down the road. It's also adjusted to try to account for seasonal variations -- the normal ups and downs of employment, like school bus drivers losing their jobs in early summer. As it happens, the state says, it's been a particularly difficult year to adjust because the usual patterns are all cattywampus.

Unadjusted, the job numbers are actually down, not up. But employment always falls in July because it's being compared with employment around June 12, when school is usually still in session. The 6,300-job decline last month is the smallest for a July since 1999.

Thus, a big seasonally adjusted gain. The biggest in four years.

It might be all statistical noise -- unemployment is up. But I've been hearing some encouraging things. Job search engine says Baltimore had the second-most job postings per capita among large metro areas in the second quarter (second only to Washington). And it has the third-best ratio of postings to unemployed residents -- 1 to 1.

Some of that is about the power of relativity -- as in, it's worse elsewhere. Job postings in Baltimore are down 5 percent from a year ago, vs. a 30 percent drop nationwide, says.

It sure would be good for the housing market, and especially the foreclosure rate, if job creation revs up in a big way.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (3)
Categories: The economy

August 4, 2009

Some good economic news

Jay Hancock notes on his blog today that the Conference Board is seeing good help-wanted stats -- at least relatively speaking -- for Maryland.

I'll let him sum it up:

Maryland had the best ratio in the nation of the number of jobs listed compared with unemployed people seeking work; to wit, there are two people looking for work for every one help-wanted posting. Not perfect, but compare that with Michigan, where there are 10 people looking for work for every opening listed. In Pennsylvania there were nearly five unemployed folks for every opening.
Posted by Jamie Smith Hopkins at 9:16 AM | | Comments (0)
Categories: The economy

August 1, 2009

New jobs -- er, maybe

As Anne Arundel County tries to prepare for growth at Fort Meade, there's one question mark that has nothing to do with the government-worker relocation better known as BRAC. It's the National Security Agency, and how much it will expand.

A lot, the county thinks. Possibly.

Not surprisingly, county leaders are having a hard time getting the secretive "No Such Agency" to loosen its lips.

What we do know (because even secretive agencies have to file notices with the Federal Register) is that NSA wants to build 5.8 million square feet of space at Fort Meade over a 20-year period -- enough to house 11,000 employees.

What we don't know is whether those employees would be holding 11,000 new jobs, or whether they're current employees who will be moved from other buildings on and off Fort Meade. Or some combination of the two options.

What's this got to do with real estate wonkery, you ask? Several things, as it happens.

Continue reading "New jobs -- er, maybe" »

Posted by Jamie Smith Hopkins at 8:00 AM | | Comments (1)
Categories: The economy

June 2, 2009

Maryland's economy in 2008

The U.S. economy officially peaked in December 2007, which means all of last year the country was in a recession. But what about Maryland?

It probably depends on your definition. The National Bureau of Economic Research, which "calls" recessions, makes its decisions mainly by looking at job numbers, income and economic growth (gross domestic product).

I mention this because today the federal government released GDP by state, which gives us a peek at local economic activity.

Maryland's GDP growth, which was 1.8 percent in 2007, slowed to 1.3 percent last year. The United States saw a much more precipitous drop -- from 2 percent to 0.7 percent. That's according to the Bureau of Economic Analysis.

(Wait, you wonks are saying, isn't a recession by definition a drop in GDP? Like, two consecutive quarters or somesuch? Nope, the NBER says. A recession frequently does show a two-quarter-or-more drop in GDP, but not always.)

So that's the story on GDP -- better in Maryland than in the U.S., but less growth than before. As for income: Maryland's per-capita personal income rose 3.5 percent last year. That's also a slowdown from 2007, when per-person income in the state jumped nearly 6 percent. (The country saw a similar-sized drop in per-capita income growth, but it was lower than Maryland's to begin with. So its 2008 increase of 2.9 percent is also lower than Maryland's.)

And what about employment? No growth there. Maryland shed almost 10,000 jobs last year, according to the Bureau of Labor Statistics. That's a drop of almost half a percent. Exactly the same decrease the nation as a whole saw last year, as it happens.

So: Local recession or not? It might be a semantics issue at this point. For the housing market, at least, a slowdown in economic growth and income growth paired with a loss of jobs isn't good news, whether you slap the "R" word on it or not.

Posted by Jamie Smith Hopkins at 10:42 AM | | Comments (0)
Categories: The economy

March 12, 2009

Md. unemployment jumps upward

Maryland's unemployment rate went from 5.4 percent in December to 6.2 percent in January, as Lorraine Mirabella reports today. That's a big jump in one month, and high for the land of pleasant living.

What made me go "whoa," though, was the job-cutting. The state had about 40,000 fewer jobs in January than it did a year earlier, according to the most recent Labor Department figures. The federal government significantly revised its 2008 job figure in Maryland so instead of a gain it's a loss.

Jobs and housing are inextricably linked, which is why I'm mentioning it. I'd like to hear from job hunters: Are you seeing openings in your field? How's the search going? And if you're out of work and a homeowner, how are you dealing with the mortgage?

Posted by Jamie Smith Hopkins at 7:57 AM | | Comments (0)
Categories: The economy
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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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