Best and Worst Cities for Consumers Seeking Debt Relief
Analysts are showing that some cities are closer to economic recovery than others, offering quicker debt relief to their populations. Overall, economists were anticipating national recovery to begin as early as summer of 2009, but definitely by the end of the year. They are noting some cities poised on recovery, while others are showing signs of a longer turnaround time.
According to a new study by Moody’s Economy, some cities are ready to recover. The survey examined estimates of projected GDP of various cities and weighed them against the unemployment figures as posted by the Bureau of Labor Statistics. In addition, home prices, consumer incomes and affordability data from the National Association of Home builders were factored into the final list of growth-prone cities. Home prices were not a factor because, in general, cities making the quickest recovery didn’t see a huge housing collapse.
Another important factor in recovery time is the city’s individual economic structure. For example, cities such as Detroit and Flint., Mich., were hit particularly hard by the recession because of their heavy reliance on manufacturing. The manufacturing industry was crushed, and many people suffered as a result. The changing economy is most likely not going to create enough jobs to employ a large portion of the people who lost their jobs. Analysts are confirming speculation that cities like Flint may never return to their original population or GDP.
Financial hub hit hard
New York City, considered the hub of finance, is also set to recover slowly and possibly never return to its former state. Unemployment rates are high, and homes are unaffordable. This creates a market that wont’ be very attractive to new inhabitants. The NAHB’s Housing Opportunity Index shows that in New York only 14 percent of homes are affordable based on the city’s median income, citing this as the “least favorable market” in the U.S.
Cities on the verge of recovery
In the end, the cities that are poised on the verge of recovery are ones that have strong technology bases, rather than manufacturing or finance. Both industries suffered greatly, leaving consumers involved in their markets seeking debt relief with more desperation than other areas. Here are the top three cities set for a quick recovery:
Austin, Texas, with a current GDP of $72.4 billion and unemployment rate of 5.8 percent, is set to recover quickly. Due to the moderate unemployment rate, the city’s recovery may be one of the quickest and most seamless. It is also home to Dell computers and was ranked as one of the Best Big Cities for Jobs by Forbes.com.
Fayetteville, Ark., with a current GDP of $13.9 million and unemployment rate of 5 percent, is also set to return to normal activity relatively quickly. This city is home to Wal-Mart superstores, and though Wall Street faltered during the economy, Wal-Mart never did. The company may have single-handedly kept its employees afloat throughout the recession.
Boulder, Colo., has a GDP of $15.6 billion and unemployment rate of 5.7 percent. The University of Colorado is the city’s biggest employer and provided many stable jobs for residents. It’s also home for a number of high-tech laboratories. Moody’s prediction is that Boulder’s economy will dip less than 1 percent before growth starts again.
Rounding out the top five cities facing speedy recoveries are: Huntsville, Ala., and San Antonio, Texas.
Some cities not so lucky
Of course, on the other hand there are cities that are not going to recover quickly. Flint, Mich., once the automobile capital, is predicted to suffer considerably for the next decade. Its huge unemployment rate, which is due to the automobile industry’s collapse, brought Flint’s economy to its knees.
Fresno, Calif., Detroit, Mich., and Modesto and Salinas, Calif., are the cities predicted to recover the slowest. All experienced either a huge unemployment rates or were heavily dependent on either the auto or real estate industry for their economic sustenance.