TIP Strategies is a privately held Austin-based economic development consulting firm committed to providing quality solutions for public and private‑sector clients.
This blog is dedicated to exploring new data and trends in economic development.
At the IEDC Leadership Summit in Orlando this week, Jon Roberts will continue the conversation he began a year ago with his Future of Jobs Ignite presentation. The presentation discusses three perspectives (individual, firm, and policy) from which the term “job” can be defined to offer a historical context for our present conversation. In short, the term “job” as we understand it today suggests a specific employer-employee relationship that developed during the Industrial Revolution and has persisted over the last century.
Our notion of a “job,” however, assumes a relationship that is dissolving. Despite the gradual deconstruction of the employee-employer relationship, economic development professionals still use jobs as a metric for economic growth. If job creation is our objective, then whose job is it to create jobs? What roles should the public and private sectors play in job creation?
Jon argues that we are asking the wrong question. We should be asking: does a healthy economy even require jobs? No. Productivity is required, and that has been increasingly divorced from employment over the past 50 years. GDP per capita has more than doubled since 1960, while at the same time the share of the working age civilian population contributing to that GDP growth has increased only 4% overall in 50 years. Since 2000, the labor force participation rate has declined from its peak at 67.1% to its current rate of 63.7%.
If no one is responsible for creating jobs, and productivity is possible with fewer and fewer jobs over time, then we should ask: what are the conditions under which jobs are created? Or, more accurately, what are the conditions under which value is created? What does it mean for economic development organizations to support the creation of value? How should our evolving understanding of the labor market shape the practice of economic development?
Catch the Does a Healthy Economy Require Jobs? panel on Tuesday, January 29th, 11am-12:30pm.
Moderator: Raymond Gilley, Executive Counsel/Director, Thompson Wesley Wolfe, LLC, Orlando, FL
• Maureen Collins-Williams, CDM, Director – Entrepreneurship Outreach and Regional Business Center, University of Northern Iowa, College of Business Administration, Cedar Falls, IA
• Steve King, Partner, Emergent Research, Lafayette, CA
• Heidi Pickman, Communications Director, California Association for Micro Enterprise Opportunity, San Francisco, CA
• Jon M. Roberts, Managing Director, TIP Strategies, Inc., Austin, TX
By: RealtyTrac Staff
IRVINE, Calif. – Oct. 11, 2012 — RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for September and the third quarter of 2012, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 180,427 U.S. properties in September, a decrease of 7 percent from the previous month and down 16 percent from September 2011. September’s total was the lowest U.S. total since July 2007.
The decrease in September helped drop the third quarter foreclosure numbers to the lowest level since the fourth quarter of 2007. Foreclosure filings were reported on 531,576 U.S. properties during the quarter, a decrease of 5 percent from the second quarter and a decrease of 13 percent from the third quarter of 2011 — the ninth consecutive quarter with an annual decrease in foreclosure activity. The report also shows one in every 248 U.S. housing units with a foreclosure filing during the quarter.
“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.
“Meanwhile, several states where the foreclosure flow was not so dammed up last year could see a roller-coaster pattern in foreclosure activity going forward because of recent legislation or court rulings that substantively change the rules to properly foreclose,” Blomquist added. “A backlog of delayed foreclosures will likely build up in those states as lenders adjust to the new rules, with many of those delayed foreclosures eventually hitting down the road.”
Other high-level findings from the report
• The national decrease in September and the third quarter was driven mostly by sizable decreases in the non-judicial foreclosure states such as California, Georgia, Texas, Arizona and Michigan.
• Several judicial foreclosure states — including Florida, Illinois, Ohio, New Jersey and New York — continued to buck the national trend, registering substantial year-over-year increases in foreclosure activity in September and the third quarter.
• U.S. foreclosure starts in the third quarter decreased both from the previous quarter and a year ago, reversing a bump in foreclosure starts in the second quarter.
• California foreclosure starts (NOD) in September decreased 18 percent from the previous month and were down 45 percent from a year ago to a 69-month low, although the state’s foreclosure rate still ranked in the top three for the month and quarter.
• Florida foreclosure starts (LIS) in September increased 24 percent on a year-over-year basis, the 11th consecutive month with an annual increase, and the state’s foreclosure rate ranked highest nationwide for the first time since April 2005.
Non-judicial states push national numbers lower
Of the 24 states where the non-judicial foreclosure process is primarily utilized, 20 reported annual decreases in foreclosure activity in the third quarter, including Nevada (71 percent decrease), Oregon (63 percent decrease), Utah (60 percent decrease), Virginia (34 percent decrease), California (29 percent decrease), Michigan (28 percent decrease), Arizona (23 percent decrease), Colorado (21 percent decrease), Georgia (20 percent decrease) and Texas (17 percent decrease).
Nevada, Oregon and California have all enacted legislation within the past year adding more requirements for lenders to properly foreclose, while a Georgia Court of Appeals ruling in July of this year requires lenders to provide certain information on foreclosure notices that some lenders may not have been including previously.
Washington state was one of only four non-judicial foreclosure states where foreclosure activity increased in the third quarter, up 70 percent from the previous quarter and up 15 percent from the third quarter of 2011. Washington state was one of the first non-judicial states to enact legislation impacting the foreclosure process following the so-called robo-signing controversy that came to light in October 2010. The state legislature passed a law that took effect in July 2011, requiring lenders to offer mediation to homeowners facing foreclosure.
Judicial states buck national trend
Meanwhile, third quarter foreclosure activity increased on a year-over-year basis in 14 out of the 26 states with a primarily judicial foreclosure process, including New Jersey (130 percent increase), New York (53 percent increase), Indiana (36 percent increase), Pennsylvania (35 percent increase), Connecticut (34 percent increase), Illinois (31 percent increase), Maryland (28 percent increase), South Carolina (16 percent increase), North Carolina (14 percent increase), and Florida (14 percent increase).
Some notable exceptions where foreclosure activity in the third quarter decreased on annual basis in judicial foreclosure states included Massachusetts (16 percent decrease) and Wisconsin (12 percent decrease).
Foreclosure starts reverse upward trend
First-time foreclosure starts, either default notices or scheduled foreclosure auctions depending on the state’s foreclosure process, were filed on 284,720 U.S. properties during the third quarter, an 8 percent decrease from the second quarter and also an 8 percent decrease from the third quarter of 2011.
Nationwide foreclosure starts decreased on an annual basis for the second straight month in September following three straight months of annual increases. Foreclosures were started on 87,066 U.S. properties during the month, down 12 percent from August and down 15 percent from September 2011.
September foreclosure starts decreased on an annual basis in 31 states, including California (45 percent decrease), Arizona (34 percent decrease), Michigan (22 percent decrease), Georgia (21 percent decrease) and Texas (19 percent decrease).
States with the biggest annual increases in foreclosure starts in September included New Jersey (424 percent increase), Pennsylvania (134 percent increase), New York (95 percent increase), Washington (60 percent increase) and Florida (24 percent increase).
Florida, Arizona, California post top state foreclosure rates in third quarter
Florida foreclosure activity in the third quarter increased 14 percent from a year ago, the third consecutive quarter with an annual increase and boosting the state’s foreclosure rate to highest in the nation. One in every 117 Florida housing units had a foreclosure filing in the third quarter, more than twice the national average.
Florida’s foreclosure rate also ranked highest in the nation in September, the first time since April 2005 that Florida has held the No. 1 spot. Florida foreclosure starts in September increased 24 percent from a year ago — the 11th straight month with an annual increase — and Florida bank repossessions (REO) increased 23 percent year over year — the ninth straight month with an annual increase.
Arizona REOs in September increased 2 percent from a year ago, the first year-over-year increase in Arizona REOs since November 2011, but the state’s overall foreclosure activity was down on an annual basis both in September and the third quarter thanks to big drops in foreclosure starts. Despite those decreases, one in every 125 Arizona housing units had a foreclosure filing during the third quarter — the nation’s second highest state foreclosure rate.
California also posted a foreclosure rate of one in every 125 housing units with a foreclosure filing in the third quarter, but the state’s foreclosure rate was slightly lower than that of Arizona, ranking No. 3 among all states for the quarter. A total of 109,369 California properties had foreclosure filings during the quarter, the highest of any state but still down from the previous quarter and a year ago.
Days to foreclose at record 382 days, legislation extends process in some states
U.S. properties foreclosed in the third quarter took an average of 382 days to complete the foreclosure process, up from 378 days in the previous quarter and up from 336 days in the third quarter of 2011. It was the highest average number of days to foreclose going back to the first quarter of 2007.
The average time to complete a foreclosure increased substantially from a year ago in several states where recent legislation and court rulings have extended the foreclosure process. These states included Oregon (up 62 percent to 193 days), Hawaii (up 62 percent to 662 days), Washington (up 62 percent to 248 days) and Nevada (up 42 percent to 520 days).
The average time to foreclose decreased from a year ago in 15 states, including Arkansas (down 49 percent to 199 days), Michigan (down 15 percent to 226 days), Maryland (down 9 percent to 541 days), California (down 8 percent to 335 days), and New Jersey (down 4 percent to 931 days).
New Jersey documented the second longest state foreclosure timeline in the third quarter behind New York, where the average time to complete a foreclosure was 1,072 days for properties foreclosed during the quarter. Florida registered the third highest state foreclosure timeline, 858 days — down slightly from 861 days in the previous quarter — and Illinois registered the fourth highest state foreclosure timeline, 673 days.
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month and quarter — broken out by type of filing. Some foreclosure filings entered into the database during a month or quarter may have been recorded in previous months or quarters. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the quarterly report, if more than one foreclosure document is received for a property during the quarter, only the most recent filing is counted in the report. Both the quarterly and monthly reports check if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report does not count the property again in the current month or quarter.
The RealtyTrac U.S. Foreclosure Market Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.
By: USC Annenberg School of Journalism
Via: APM Marketplace
The September unemployment rate fell for the right reason, for a change: More people are seeking work and finding it. Students from the Annenberg School of Journalism profile four California companies that are hiring highly skilled workers. Here are their stories:
Profile: Ramping up but hard finding the right skills
Cornerstone OnDemand, a publicly traded company, provides talent-management, learning, and performance-management software that helps companies manage their workforce. Its clients include Starwood Hotels and Resorts, The Neiman Marcus Group and Turner Broadcasting.
Company: Cornerstone OnDemand Inc.
Location: Santa Monica, California
Industry: Information technology
Annual revenue: $ 75.5 million (2011)
2008 workforce: 152
Current workforce: more than 650
The company’s workforce has more than quadrupled in the past four years, and it’s currently trying to fill 65 positions in fields such as marketing, information technology, finance and administrative services. It hasn’t been easy.
Tina Figueroa, Cornerstone’s vice president for talent and administration, says the company is often looking for people with skills that are already in high demand.
“What we’re finding, and what recent research supports, is that, despite the unemployment rate there are skills shortages,” Figueroa says. That has sparked what she calls “a war for talent.”
Figueroa adds that traditional recruiting methods just don’t bring in enough of the right candidates. She has begun leveraging social networks and online communities to look for talent. Cornerstone has also begun asking its own employees to scour their own social networks for qualified candidates.
- By Corrina Shuang Liu
Profile: Business and spending improving
In the past year, Joe Phelps has grown the workforce of his marketing and communications agency by nine positions, or 14%, thanks largely to clients increasing marketing budgets as the economy recovers. The salaries he offers average around $90,000. But he has been hiring people whose skills are in demand: software programmers, digital producers and search-engine-optimization specialists.
Company: Phelps (formerly The Phelps Group)
Location: Santa Monica, California
Industry: Marketing and Communications
Annual revenue: $65 million
2006 workforce: 53 (2006)
Current workforce: 75
Yet Phelps says he doesn’t expect profits to grow this year. Instead, he’s beefing up his staff in anticipation of new accounts and greater demand from longtime clients.
“For many of our hires, the revenue for which they were hired really hasn’t even come to fruition yet,” Phelps says. “Clients say, ‘We’re going to be spending this.’ And we need to be ready.”
Phelps’ clients include Panasonic, Whole Foods Market and Public Storage. In 2012, Phelps added Valvoline Instant Oil Change and real estate listings giant Realtor.com, among others.
Most of Phelps’ new employees are specialists hired from other companies or straight out of prestigious universities. Finding and evaluating new talent can be a challenge, he says.
He says he has been able to grow his company because his clients include industry leaders such as Public Storage, which continued to invest during the downturn while weaker competitors retrenched.
- By Aaron Schrank
Profile: Turning adversity into opportunity
MySocialCloud sees a business model in managing what many Internet users consider a major headache: keeping track of usernames and passwords.
Location: Los Angeles, California
Industry: Internet startup
Current size of workforce: 10
The Los Angeles startup, the brainchild of siblings Scott and Stacey Ferreira, employs 10 people and expects to create 10 to 15 jobs in the new year, thanks in part to a big investment from Virgin Group founder Sir Richard Branson. The company is currently receiving 50 to 75 applications a week.
Scott Ferreira, 21, started developing web applications as a teenager seven years ago. After dropping out of the University of Southern California, he founded MySocial with his sister, now 20, in May 2011. The idea was sparked by a fatal computer breakdown that wiped out the all of the Ferreiras’ online usernames and passwords, which were usually kept on an Excel spreadsheet.
The Ferreiras pitched the idea to Branson after meeting him at a charity event. He later later introduced them to venture investor Jerry Murdock. MySocialCloud also attracted the attention of Photobucket co-founder Alex Welch. The three now are the site’s primary investors and business mentors.
MySocialCloud says its users are college students, professors and small businesses. The website can automatically help users log in to any site that they’ve stored. As passwords get longer and more complicated, and more social media emerge, the company is betting that more people will see value in having one site safely taking care of all of their passwords.
- By Shako Liu
Profile: Healthcare and electronic records prove to be a boon
The government’s push to convert doctors’ paper medical files to electronic records is fueling a hiring boom at Practice Fusion.
Proponents of electronic medical records (EMR) say the digital systems do much more than just clear out closets in doctors’ offices. They help doctors communicate more effectively with patients and colleagues, which leads to more precise medication management, fewer unnecessary tests, more accurate diagnoses, and better outcomes.
Company: Practice Fusion
Location: San Francisco, California
Industry: Electronic Medical Records
Annual revenue: not disclosed
Workforce at the start of 2012: 130
Current workforce: 220
“We’re trying to make technology to help save lives,” says Sheila Ryan, Practice Fusion’s vice president of People and Culture, who may have the world’s best job title.
It’s Ryan’s responsibility to make sure the privately held company is growing fast enough to satisfy the demand for that technology. Practice Fusion had 130 employees in January. That number is on pace to double by the end of the year, Ryan says.
Practice Fusion is hiring engineers, web designers and product managers. The firm also says it’s focusing more on customer service, and has grown its tech support team from one person to 20 over the past nine months. And, the company is trying to stock itself with a broad range of talent, such as a team of six data scientists who scour health records — with patient names removed — to dig for trends that could be useful in evaluating the quality of care.
Ryan says the company feels confident about its expansion plans, in part because of the federal government’s commitment to EMR: Doctors who treat patients on Medicare and Medicaid are eligible for federal grants to help offset the cost of converting paper records to digital.
“Our biggest concern would be if economic conditions pushed these doctors out of business,” says Ryan. “But that’s what our product helps prevent. We want to keep the small doctors alive and well, by helping them switch to electronic records, by making them more efficient and more effective.”
- By Jake de Grazia
By: Shaila Dewan
Via: The New York Times
Even some of the cities that suffered the most in the housing bust are showing signs of improvement, with prices beginning to recover in places like Miami, Atlanta and Detroit, according to the latest housing data.
In fact, there is improvement across the board, with home prices nationally inching up over their levels a year ago for the first time since 2010, when sales were helped by a temporary tax credit for home buyers.
The data is contained in the S.&P./Case-Shiller Home Price Index, which tracks prices nationally and in 20 major cities. Both showed gains over the past year, from June to June — 1.2 percent nationally, and 0.5 percent in the 20 cities. Though prices were still depressed in a few of the cities compared with a year ago, every one of them showed price gains from May to June. The report is highly regarded because it tracks actual price differences as a home is sold and resold over time.
[click image for an interactive version]
Home prices are still down almost a third from their peak in 2006, but most recent reports are pointing to a slow recovery and increased optimism that could encourage potential buyers to take the plunge.
In Atlanta, the city with the biggest one-year decline in home prices, the market perked up by about 4 percent in May and again in June, according to nonseasonally adjusted numbers.
Detroit prices increased 6 percent from May to June, while in Miami, prices rose by 1.4 percent in May and 1.6 percent in June. A surge in prices is to be expected in June, a time when the market ordinarily heats up, but analysts called these increases particularly strong.
Housing went from being a huge engine of growth to a drag on the economy as inventories swelled, foreclosures mounted and prices crashed. More recently, economists have pointed to a slow turnaround, saying it is once again contributing to the nation’s economic output.
Several factors have helped: investors have bought cheap properties, reduced inventory has led to competitive bids, and lower interest rates have buoyed buyers — at least those who can qualify for a mortgage.
The number of foreclosures has declined as banks responded to tightened oversight in some jurisdictions. After the national settlement over foreclosure abuse, housing counselors report that banks are taking more aggressive measures to keep homeowners in their homes.
But economists warned of potential dangers that could still hold home buyers back. Consumer confidence unexpectedly dropped in August, the Conference Board reported Tuesday, largely because of diminished expectations for the future. The November election and the “fiscal cliff” of expiring tax breaks and looming spending cuts at the end of the year may also be muting home sales.
“All those kinds of things will weigh on housing because it’s still a big decision and a big purchase for people,” said David M. Blitzer, the chairman of the index committee for S.& P. Dow Jones Indices, which produces the home price index. “But all the underpinnings look better.”
Ed Stansfield, the chief property economist for Capital Economics, warned that the euro zone crisis could set off another financial disaster that would keep people from buying homes. “Even so,” he wrote, “with prices rising at an annualized rate of close to 10 percent in the second quarter, without another major shock, house prices are more likely to surprise on the upside than the downside this year.”
Some of the strongest showings could be seen in many cities in the South and West that were among those hit hardest. When home prices were rising, places like Phoenix and Las Vegas were growing rapidly and real estate was a major part the local economy. Homes there lost more than half their value, according to Case-Shiller data. But while Las Vegas has shown little movement, recovering 4.5 percent from its trough, Phoenix has rebounded by 14 percent, San Francisco by 18 percent and Atlanta by 11 percent.
Mark Zandi, chief economist for Moody’s Analytics, said the Phoenix economy is more diverse than Las Vegas’s, so the job market started to recover sooner and investors have been more eager to buy. “That said,” he added, “I don’t think the Vegas economy and housing market are too far behind.”
Places that showed relatively small declines, like Denver and Dallas, have shown correspondingly small upticks in prices. In Washington, which is somewhat shielded from recessions by the presence of the federal government, homes lost a third of their value but have recovered by more than 14 percent.
By: Blake Farmer
The riverfront streetcar passes the Downtown Memphis cityscape. Memphis — a city that has struggled with population decline and high unemployment — wants its native sons and daughters to help fuel a comeback.
Stacey Vanek Smith: You might hear “Memphis” and think Beale Street, the blues and Elvis Presley. But outside the spotlights, Memphis is dealing with major urban challenges. So the city is launching a PR campaign, aimed in part at bringing former residents back to the city.
From WPLN, Blake Farmer reports.
Blake Farmer: A minute-long web ad has an uncanny resemblance to a popular Chrysler commercial about the Motor City. This spot describes Memphis as “real and raw.”
Advertisement: The stage is set. This is Memphis. This is the comeback.
The comeback campaign includes strategically placed billboards in nearby metropolitan areas like Little Rock, St. Louis and Nashville. Memphis has been shrinking.
Mary Cashiola works in the mayor’s office and says the campaign is meant to tap a deep-rooted Memphis loyalty.
Mary Cashiola: The feeling is always like, ‘”Well, I’m going to be back one day.” So this campaign asks, “Well, why not today?”
Cashiola points to the green shoots of a turnaround. Unemployment dropped below double digits. A billion dollars in economic development was announced for the city last year, and on Broadway, “Memphis” the musical won a Tony.
The comeback campaign targets prospective tourists as well as people like youth minister David Rubio. He moved his family to Nashville seven years ago, and unlike some Memphis expats, he feels an unexplained draw to move back.
David Rubio: I will frequently have a conversation that goes something like this, “Oh you’re from Memphis? Aren’t you glad you got out of there? Isn’t it great to be free?”
Rubio bristles at the negative stereotypes, even if some are deserved. He cringes when Memphis ends up at the top of some horrible list, like infant mortality rates. Will a PR campaign make the hometown pull irresistible?
Rubio: I hope the come back happens, even if it happens without me.
For now, Rubio says he’ll be rooting for Memphis — but from three hours east.
In Nashville, I’m Blake Farmer for Marketplace.
By: Lam Thuy Vo and Jacob Goldstein
Via: NPR, Planet Money
When you compare government jobs and private-sector jobs over the past several years, you see two different universes.
As the U.S. went into the recession, government jobs held steady as huge numbers of private-sector jobs disappeared. Since the recovery started, the reverse has held true: the private sector keeps adding jobs, and the government keeps cutting.
There are a few reasons for this. For one thing, governments don’t fire (or hire) as quickly as private companies. For another, the federal stimulus program gave hundreds of billions of dollars to the states in 2009, which helped them avoid layoffs for a while.
Eventually, though, the recession finally caught up to state and local governments, in the form of lower tax revenues. Local governments, which rely heavily on property taxes, were particularly hard hit.
Cuts in government jobs have been slowing lately. A report out yesterday said state tax revenues are now above where they were at the start of the recession.
Friday’s big July jobs report may not be an especially helpful indicator for the state of government jobs; Jim O’Shea of High Frequency Economics told me that the July data are notoriously noisy, because lots of people leave education jobs at the end of the school year.
Whatever happens with government jobs, when you look at the big picture, it’s clear that the story of jobs in America is mainly a private-sector story.
The private sector is so much bigger than the public sector, and the job cuts during the recession were so massive, and the recovery has been so slow. The jobs picture won’t get much better, and the economy won’t really get back to normal, until the private sector adds millions more jobs. That may take years.
Note: The numbers for government jobs in all graphs exclude temporary federal workers hired for the 2010 Census.