No matter how you look at it, it’s been a long time since the Buffalo Niagara economy has been this strong.
The labor market is better than it’s been since the Great Recession and beyond. Home sales are bustling.
But it’s not all good news. Our job market still is not growing as fast as the rest of the country. Our home prices are rising slowly. Wage growth is sluggish.
Here’s a closer look:
• We haven’t seen job growth like this for the past 25 years, but the rest of the country has seen it quite often. We’re thrilled that our job growth through November of last year averaged around 1.7 percent – more than double 2014’s gains – and rightly so.
The country has been growing a little bit faster, around 1.9 percent, over the past year, and so has the rest of the state, thanks to New York City’s above-average hiring. In fact, over the past five years, the nation has averaged 1.9 percent annual job growth. Even with our hiring spurt last year, we haven’t had a single year with that much job growth since 1989.
• Unemployment has dropped below 5 percent for the first time since late 2007. With a 4.9 percent jobless rate in November, unemployment is back in the same 4 percent to 5 percent range it was in during the years leading up to the Great Recession.
“It’s good news that there’s a drop in unemployment,” said Frederick Floss, a SUNY Buffalo State economist. “It’s better news that there’s strong growth in jobs.”
But unemployment elsewhere is a little bit lower – 4.8 percent across the country and 4.7 percent throughout the state.
“There’s still some structural unemployment, because you have some declining industries,” said John Slenker, the regional economist for the state Labor Department.
There also are pockets within the local labor market where workers are in short supply, especially within the science, technology, engineering and math fields, sometimes called STEM. Local contractors have been bringing in skilled tradesmen from union halls outside the region to meet some of their labor needs.
“When you have to bring in workers from out of town, your economy is humming along pretty well,” Slenker said. “But the labor force that’s on the sidelines needs to upgrade their skills so they have what employers want.”
• The housing market is slowly but steadily improving, too. Home sales were up 10 percent through the first 11 months of 2015, and with a strong December it could wind up being the strongest year for home sales in at least 20 years, according to data from the Buffalo Niagara Association of Realtors.
With homes selling briskly, fewer houses are on the market, which is increasing competition for the available inventory. With just over 4,700 homes up for sale in November, the number of homes listed for sale has been steadily declining for four years and now is at a 10-year low. That’s tipping the market in favor of sellers, with just a 5.3-month supply of homes up for sale – the lowest in at least five years and less than the 6-month market that is considered the balancing point between a buyer’s and a seller’s market.
But the solid sales aren’t pushing up prices. The median sale price of homes that sold during the past 12 months is up just 1.7 percent to $124,000. That’s well below the 6.3 percent jump in the nationwide median sale price, which topped $220,000 in November.