Roller Coaster Economics
Charlotte-Mecklenburg got hit with conflicting doses of news on the economic front this month. While the N.C. Employment Security Commission last week announced that Mecklenburg’s unemployment had inched downward to 11.1 percent for March from 11.8 percent in February, the marginally good news was tempered by the release yesterday of the S&P/Case-Shiller Home Price Index, which showed Charlotte-area home prices slipping 1 percent in February from the previous month, marking the seventh straight month of declines.
Compared with February 2009, Charlotte-area home prices were down 2.5 percent, posting a recent index low, a distinction the Queen City shared with Las Vegas, New York, Portland, Seattle, and Tampa. Nationwide, prices rose by 0.6 percent. But coupled with the new lows posted in some cities, David Blitzer, chairman of the Index Committee at Standard Poor’s, cautioned against reading too much into the gains.
“These data point to a risk that home prices could decline even further before experiencing any sustained gains. While the year-over-year data continued to improve … this simply confirms that the pace of decline is less severe than a year ago,” Blitzer said. “It is too early to say that the housing market is recovering.”
Home sales are expected to show improvement next month, attributed largely to people snatching up the homebuyer tax credit that is slated to expire Friday. On that note, Blitzer delivered another warning.
“Amidst all the news, however, we should also pay heed to foreclosure activity, which have reached their highest level in at least the last five years,” he said. “As these homes are put up for sales, we may see some further dampening in home prices.”
Similarly, Mecklenburg County’s lower March unemployment numbers, while welcome by any measure, should be taken with a cautionary grain of salt. Mecklenburg added just over 7,000 jobs compared to the previous month, but the bumped employment number of 410,101 was still short nearly 37,000 jobs from the number of people employed in April 2008, when the county’s unemployment rate stood at 4.8 percent.
There’s still a long road to go, in other words, before talk of a substantive job recovery becomes reality.
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