Illinois is a state that depends on its manufacturing and construction sectors. As a result of the sliding economy, the vibrancy of both sectors has severely declined over the past year.
Indeed, for the fifth month in a row, the IL State Unemployment Rate has risen - to a statewide average of 7.3% -and is now over the national average of 6.5%. IL population continues to grow, so jobs must be created at the rate of several thousand each month just to accommodate the growing work force here.
Let's intuitively relate this to the Real Estate Market - across IL and in Chicago. Most would assume the fear of losing one's job would put a damper on their plans to purchase a new home.
Statewide, the unemployment rate increased 5.8% versus the month of September - from 6.9% to 7.3%. The Construction Sector evidenced the most significant drop, losing 4,100 construction-related positions and reducing overall employment in activities related to construction to 254.500. A total of 15,200 construction jobs have been lost in IL within the past year, and 7,400 of those jobs dried up within the past two months.
Illinois has always had a large base of manufacturing, commercial, and financial employment. Locally,the job market in Illinois and Chicago has been negatively impacted by slowing demand for goods, reduced purchasing power due to the turmoil in the credit markets, declining retail sales, fewer exported goods, and a sizable drop in residential construction.
Says Maureen O'Donnell, Director of the Illinois Department of Employment Security, "Although Illinois has a diverse economy, the national economic slowdown has had a negative effect on Illinois unemployment and thus we need federal government assistance with an investment in infrastructure and additional stimulus to help create jobs."
Nationally, unemployment jumped to its highest level in 14 years, to 6.5% in October, according to U.S. Labor Department statistics released earlier this month. With nationwide recession growing deeper, many experts feel the jobless rate in the U.S. could exceed 8% before the end of 2009.
Perception often becomes reality, especially for homebuyers nervous if they can keep up with the likely higher payments on a new home if their job situation becomes tenuous. Many from Chicago our Team has spoken with have decided to put their home purchase plans on hold until they feel more comfortable with their own job security.
In addition, those considering selling are drawing back, and staying put for the time being, unsure if they'll be able to comfortably afford something new.
See our post from Friday afternoon at BlogChicagoHomes.com, along with a link to James P. Miller's article in last Thursday's Chicago Tribune for more info.
DEAN & DEAN'S TEAM CHICAGO
