Brookings Institute report finds rebound from recession is steady but slow in the area

12/19/2012

Metro Toledo’s recovery from the recession continues to move forward with both its unemployment and employment pictures improving, according to the latest quarterly report from a Washington think tank. But the gains are only slight and the road ahead appears to be long.

Overall, the Toledo area’s recovery from the recession ranked 18th in the third quarter, down from 16th in the previous quarter, according to the latest 2012 Metro Monitor report produced by the Brookings Institution Metropolitan Policy Program.

The report, released Wednesday, attempts to examine and rank the recoveries of the 100 largest U.S. metro areas by examining their performances in four categories: employment, unemployment, the gross output of the metropolitan area, and housing prices.

Brookings said that with a decrease of 5.3 percentage points — from its peak of 12.9 percent in the second quarter of 2009 to 7.6 percent — Toledo had the best improvement in unemployment of any metro area. However, in employment, metro Toledo has improved just 2 points since its low point in the fourth quarter of 2009 and ranked 75th overall. That likely indicates that people have moved away, retired, or given up looking for work.

Still, both categories showed minor improvement. Metro Toledo had been ranked fourth in unemployment and 79th in employment in the previous quarter.

“You’re certainly improving. If you just take the overall rankings, Toledo is doing well,” said Alec Friedhoff, a research analyst with Metropolitan Policy Program and the lead developer of Metro Monitor.

“And employment is growing, but it’s been growing slowly. That’s good and bad, because it’s not going to get you where you need to be quickly,” Mr. Friedhoff said.

In metropolitan output, a gauge similar to gross domestic product, metro Toledo ranked 30th in the latest report, with a gain of 8 percent since the low point in the second quarter of 2009.

The area was ranked 29th in the previous report.

In home prices, the area ranked 76th, gaining only 0.3 percent since the second quarter of this year, which marked the low point, according to Brookings. In the last report metro Toledo housing prices ranked 79th, having dropped to a new low.

Mr. Friedhoff said the output finding was a good one: “Output is growing briskly.”

Housing prices, while headed up finally, are still in a fragile state. But much of the country is in a similar position, Mr. Friedhoff said.

“Most metro areas are still just finding their troughs,” he said. “It’s still unsettled in many places. Three quarters ago we saw a rise in home prices, then two quarters they were in decline.”

Barbara Stout, a real estate agent with the Danberry Co. and the past president of the Toledo Board of Realtors, said there is reason for optimism in the local housing market because sales are increasing and had been brisk up until recently when they experienced an expected seasonal decline.

But housing prices are another story. They are rising but very slowly, she said.

“I think things are heading in the right direction, but I also think they are going real slow. It will take quite a while for them to come back,” Ms. Stout said. “Even at 3 to 3.5 percent a year, that would still take a long time to get back to where we were.”

Most local real estate experts put the decline in housing prices since 2005 in a range of 20 to 30 percent. Brookings, which gets its data from Moody Analytics, pegged the metro Toledo decline in housing prices at 31.8 percent since the first quarter of 2005.

Housing prices aside, Mr. Friedhoff said metro Toledoans should be experiencing a feeling that the area is on the rebound from the recession. “I think things do feel a little better with output and job growth,” he said. “And the housing recovery there could be real.”

However, the employment numbers may feel better than they actually are, he cautioned.

“I’m sure the unemployment rate feels very positive, but it’s relevant to look at size of the labor force. If that’s been lowered overall, then that could be why the rate has been dropping so much,” Mr. Friedhoff said.

Toledo’s overall recovery ranking was the highest in Ohio. Other Ohio metro areas ranked were Youngstown at 22, Columbus at 32, Akron 33, Dayton 44, and Cleveland at 81.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.