Unemployment Rate Soars to 5.5% (Know Your Local Market!)

The unemployment rate made its biggest jump in more than two decades in May.

The jump from 5% in April to 5.5% in May was the biggest month-to-month jump in unemployment since February of 1986. A jump of this magnitude is considered a clear warning sign of a recession.

This information and this report is no different from the national news reports that come out regarding real estate.

Accurate data? Sure! Yet not at all fair or even realistic on a localized, regionalized level. Every region has its own socioeconomic circumstances and realities. While this unemployment number is significant and important to consider, we must also research and consider our localized data in order to provide the best service and information to our real estate clients.

I would suggest that we must go a few steps further in educating ourselves about our localized markets.

What is the median price of homes in your area? What is the average price of homes in your area? What is the average DOM/days on market? What is the average list price to sold price ratio? I'm certain most of us can either answer these questions or we're smart enough to get the answers quickly from our broker, our local MLS reports or from a trusted colleague.

What will you say when your new client who is relocating to the region asks you: "What is the unemployment rate in this area?"

Sound silly? Perhaps not important to us as Realtors? Consider that of the 6 states in the nation with the greatest number of homes in foreclosure, two of these states, Michigan and Ohio, have serious problems with high rates of unemployment!

They are related. High unemployment rates can have an effect on home values, and subsequently the rate of foreclosures in an area.

Let's assume that most people won't ask such as question. OK, so what? What if they suddenly get cold feet from buying a home because they heard that "all homes are in foreclosure, the markets are falling, everyone is unemployed, aspertame will kill you, Iran has nukes and the sky is falling!".

Well, it's just nice to have a few answers, a few facts, about your local market to help overcome the national news media and bring some calm to today's nervous buyers!