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Lately, we’ve seen employment splashed across headlines nationwide, as the struggling rates for employment recovery have painted a challenging picture for the US economy in a return to it’s previous pre-COVID era. Staffing challenges and frustrations from employers have become increasingly more common as businesses around the nation have begun to re-open and operate again at larger or even full capacity. The fallout impacts of the federal unemployment benefits and stimulus, along with the state based benefits, have created challenges for market recovery that still have some debating whether the US is indeed past the recession or not.
It's not all bad news though, as Reuter’s cites that, “The headline jobs gap is large, but the shortfall is also concentrated in the leisure and hospitality industries that may be the slowest to recover given restrictions on some activities like sports events, and the reluctance of some people to mingle too closely.”
Despite the challenges for some industries, and the reluctance to the return of the workforce by others, there are many markets that have recovered extremely well and are fully into an expansion within the cycle. This information is vital for real estate investors, as the best approach for mitigating risks, particularly in a turbulent market for the US as a whole, is to diversify through fund strategies, carefully evaluated individual investments in varying markets, or other investment vehicles. Selecting the markets that are leading in economic recovery is clearly an important factor to consider.
So, which markets are leading the pack? Which have a long way to go? As of April 2021, the national unemployment rate was averaging at 6.1%, with the median household income at $53,482 a year. In contrast, let’s take a look at where other large metropolitan areas stand in comparison:
The 7 Markets Struggling Most in Employment Recovery
7. Riverside-San Bernardino-Ontario, CA
Unemployment Rate (as of March 2021): 7.7%
Recent Job Growth Percentage: -5.7%
Median Household Income: $55,362
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Carpet Installers, 49.4%
6. Houston-The Woodlands-Sugar Land, TX
Unemployment Rate (as of March 2021): 8%
Recent Job Growth Percentage: -5.6%
Median Household Income: $58,689
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Sewers, 49.7%
5. New Orleans-Metairie, LA
Unemployment Rate (as of March 2021): 8%
Recent Job Growth Percentage: -7.3%
Median Household Income: $51,808
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Broadcast Technicians, 48.7%
4. Hartford-West Hartford-East Hartford, CT
Unemployment Rate (as of March 2021): 8.2%
Recent Job Growth Percentage: -6.0%
Median Household Income: $84,092
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Farmworkers and Laborers, 49.8%
3. Las Vegas-Henderson-Paradise, NV
Unemployment Rate (as of March 2021): 8.8%
Recent Job Growth Percentage: -13.2%
Median Household Income: $63,830
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Jewelers, Precious Stone and Metal Workers, 49.9%
2. New York-Newark-Jersey City, NY-NJ-PA
Unemployment Rate (as of March 2021): 8.8%
Recent Job Growth Percentage: -9.19%
Median Household Income: $66,902
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Boilermakers, 48.5%
1. Los Angeles-Long Beach-Anaheim, CA
Unemployment Rate (as of March 2021): 9.8%
Recent Job Growth Percentage: -11.6%
Median Household Income: $60,337
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Therapists, 49.9%
Trailing Markets for Monthly Unemployment Rates in the United States
The 7 Markets Thriving Most in Employment Recovery
7. Kansas City, MO-KS
Unemployment Rate (as of March 2021): 4.2%
Recent Job Growth Percentage: -3.8%
Median Household Income: $45,376
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Textile Knitting and Weaving Machine Setters and Operators, 49.9%
6. Cincinnati, OH-KY-IN
Unemployment Rate (as of March 2021): 4.2%
Recent Job Growth Percentage: -4.7%
Median Household Income: $34,002
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Physicist, 48.7%
5. Atlanta-Sandy Springs-Roswell, GA
Unemployment Rate (as of March 2021): 4.1%
Recent Job Growth Percentage: -5.1%
Median Household Income: $56,618
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Family Medicine Physician, 49.8%
4. Oklahoma City, OK
Unemployment Rate (as of March 2021): 4.0%
Recent Job Growth Percentage: -3.4%
Median Household Income: $47,004
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Opticians, Dispensing, 49.7%
3. Raleigh, NC
Unemployment Rate (as of March 2021): 3.9%
Recent Job Growth Percentage: -5.2%
Median Household Income: $54,581
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Electrical and Electronics Drafters, 49.6%
2. Birmingham-Hoover, AL
Unemployment Rate (as of March 2021): 3.2%
Recent Job Growth Percentage: -3.7%
Median Household Income: $31,217
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Real Estate Sales Agents, 49.8%
1. Salt Lake City, UT
Unemployment Rate (as of March 2021): 3.0%
Recent Job Growth Percentage: -1.4%
Median Household Income: $45,833
Fun Fact - Current Highest Detailed Industry Increase for Employment (RSE): Marriage & Family Therapist, 49.8%
Thriving Markets for Monthly Unemployment Rates in the United States
Summary
The best approach for ensuring your investments perform well is identifying the right markets to invest in, the right deals for your risk appetite, and diversifying across markets. The right assets and the right markets can make a tremendous difference in minimizing your investment risks and maximizing your gains. Stay attuned to the trends, adapt to the climate, and keep your strategies flexible to continue growing your wealth through any stage in the cycle. Presently, the real estate market is very hot, and that’s a great sign, along with improvements in unemployment rates, that as the economy works towards stabilization there are many more profitable opportunities to come. The future is bright!
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About the Author
Ellie is the founder of Blue Lake Capital, a commercial real estate investment firm specialized in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.
Ellie is the host of REady2Scale, a podcast that highlights honest, insightful, and thought-provoking discussions on the multiple approaches for successful real estate investing.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital at www.bluelake-capital.com and learn more about Ellie at www.ellieperlman.com.
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