10 Worst Cities for Jobs Suffered From Housing Crisis

May 26, 2011 — -- Riverside in southern California is one of many US cities that experienced a real estate boom in the past decade. It was the housing boom and bust that is now causing deep misery for jobseekers.

Riverside, like nine other worst cities for job seekers, is suffering from high unemployment brought on in large part by the housing crisis.

"Many of these cities were experienced big construction booms, so when housing boom disappeared so did the jobs," Mindy Marks, a professor of labor economics at the University of California, Riverside, said.

The unemployment rate in Riverside was 13.9 percent in March, according to the Bureau of Labor Statistics.

The recession hit those with less education the hardest and Riverside is one of the least-educated metropolitan areas in the country, said Marks, who has been a resident there for seven years.

The national unemployment rate for those without a high school diploma and over 25 years of age was 14.6 percent in April, seasonally adjusted. That figure is noticeably higher than the unemployment rate for those of the same age but with a high school degree, 9.7 percent, and those with a college degree, 4.5 percent.

What also affected Riverside is its industrial presence. Marks described Riverside as a "transportation hub" that was negatively affected by the recession.

"People want less and there is less demand for merchandise," she said. "A lot of these warehouse workers and forklift operators get laid off when the economy goes down."

As students prepare to graduate next month, Marks said that her seniors may feel "more discouraged" about the economy than graduates from last year because the state's budget crisis significantly affected public university tuition costs. In November 2009, the University of California's Board of Regents voted to increase tuition by 32 percent beginning in the fall of 2010. Still more tuition hikes are under consideration.

"Their families feel less well off because they had to come up with more tuition dollars," she said.

Last November, the board approved another tuition increase of 8 percent that will begin this fall.

But she said she was still surprised that U.S News & World Report called metropolitan Riverside the worst city for job seekers in the country. The list was compiled from the 50 largest metropolitan areas by population with unemployment rate and job postings on career site Indeed.com from March 2011 as factors. The first figure is the jobless rate; the second shows the number of people per job opening.

1. Riverside-San Bernardino-Ontario, Calif. 13.9; 3.75

2. Las Vegas-Paradise, Nev. 13.3; 3.38

3. Sacramento-Arden-Arcade-Roseville, Calif. 12.7; 3.1

4. Los Angeles-Long Beach-Santa Ana, Calif. (tie) 11.4; 3.55

4. Miami-Fort Lauderdale-Pompano Beach, Fla. (tie) 10.9; 4.37

6. Detroit-Warren-Livonia, Mich. 11.8; 2.99

7. Providence-Fall River-Warwick, R.I.-Mass. 11.9; 2.25

8. Orlando-Kissimmee-Sanford, Fla. 10.4; 2.42

9. Jacksonville, Fla. 10.2; 2.58

10. Tampa-St. Petersburg-Clearwater, Fla. 11.0; 2.18

Marks said schools are still functioning and she has not noticed an overt increase in street homelessness.

"We were growing so quickly before the downturn, and the city is well managed so it still has money to build recreation centers and parks," she said. "You see development but it's mostly from local government and not as much from the private sector."

Stephen Bronars, senior economist with Welch Consulting, said depending on your skill set, the job hunt could be a lot better or worse.

Job Opportunities Dropped With Housing Market Crash

"If you've got the right skills that employers are looking for, it makes this process a lot easier," he said. "If construction workers in Las Vegas, Riverside, and Florida lost jobs, it doesn't mean they will get the jobs advertised."

Bronars said the cities included in the list lost a significant number of private sector jobs.

In the past year, the U.S. economy as a whole lost 7 percent of the jobs in the private sector, but cities like Riverside, Las Vegas and Sacramento lost about 15 percent of private sector jobs, he said.

Todd Sorensen, a professor of economics at the University of California, Riverside, said while the economy is "bad" in his neighborhood, it's not as dire as other areas of the state. The city of Merced in northern Calif. has an unemployment rate of 21.4 percent.

While he has noticed a growing number of closed businesses in downtown Riverside where he lives, he said there is less "despair than one would imagine."

The more educated workers are, the more flexible job opportunities they tend to have, "so unemployment can never be too high for too long in any one place."

But still, he said "living here does feel different than when I got here four years ago."

Sean Snaith is director of the University of Central Florida's Institute for Economic Competitiveness in Orlando, Fla., a city ranked as eighth-worst place for job seekers.

He said the housing boom that took place in California, Nevada, Arizona and Florida had "tremendous" impacts on the economy in the past decade that ultimate led to their doom.

"Real estate was white hot," he said. "Housing prices were rising phenomenally, but when the housing boom turned bust and financial crisis set upon us, those places where housing was really overbuilt and overextended had a much higher peak from which to fall."

Nevada, Arizona and California had the highest state foreclosure rates in April, according to RealtyTrac. Nevada had the country's highest foreclosure rate for the 52nd straight month, with one in every 97 housing units receiving a foreclosure filing. In a report today, RealtyTrac said foreclosures accounted for 28 percent of all home sales nationwide in the first quarter of the year, up from 27 percent in the previous quarter.

Snaith said the traditional flow of retirees into Florida was "shut off completely" with the recession. Workers' retirement accounts shrank and people were not able to sell their houses at prices that they had hoped due to the housing and financial crisis. He said people began to move to Tennessee or South Carolina, where the cost of living was lower.

Detroit, also included in the list, had a significant population drop: 25 percent in the past decade to 713,777 according to Census Bureau data released in March.

"The fates of the labor market and housing market are intertwined – twisted together like pretzel," he said. "Getting people jobs will reduce number of foreclosures and will increase buyers. You do have to have an income to get a mortgage. Those two right now will feed off of one another."

But Snaith said things will start to turn around in Florida after housing prices stop to decline and foreclosures start to decrease, especially with added jobs from the hospitality and leisure sector.

"I suggest that 2012 is runway for Florida," Snaith said. "We don't take off until we get to the end of runway though we're picking up speed."