[quote=ybitz]is there a historical correlation between unemployment rate and home prices? Logic tells me yes (high employment -> lower home prices), but as we’ve seen over the last year or so there are more factors at work than logic. Has Rich done a hard number analysis on this before? Love his graphs :)[/quote]
The effect may not be as strong as you think.
Homeowners are usually more educated than renters. I’m not going to argue that it’s not tough out there for college educated folks, but hard numbers suggest that this recession has disproportionately hit people with only a school diploma (or even without one). Last I checked, the nationwide unemployment rate for people with bachelors’ degrees was still in 4.7-4.9% range.
A good swath of the currently unemployed 11% in the county wouldn’t be owning homes even if the economy were in excellent shape.
It could be the case that high unemployment depresses rents in places where you don’t want to live anyway (e.g. Logan Heights) and where most home sales are normally to investors (the subprime period of 2000-2007 excluded).
