“Capital Insights” with Jack Kern

This is the first entry in what I hope will become a regular feature here in the markets section of Multi-Housing News Online. I'm going to be writing about Markets & Metrics, a special area near and dear to my professional heart. With the absolute proliferation of data and news releases coming out of lots of sources and the frequent misunderstandings that occur, I'm hoping to begin a dialogue with you, our readers and help point out some interesting facts, debunk some fictions and offer you some concise analysis. I hope you'll come back often and contribute too! The success of any column is the relationship between you, our readers and our ability to deliver subject matter that interests you. I hope I'll hear from you and you'll share your insights and thoughts.

Now, onto our first topic.

Employment

The employment markets have been subject to lots of press coverage, along with speculation about what is really happening with unemployment rates and I'm pretty unhappy with what I'm reading. The fact that most reporters don't understand how to read the numbers only makes the message worse. I'm also not a fan of the notion that employment drives apartment market rents, because fundamentally the total employment numbers reported don't mean as much as the individual sector numbers that comprise them. To give you an example, in markets with lots of employment coming from construction, government and trade, the impact on apartment markets isn't as significant as it is when you have jobs being generated in business and professional services, health care (which is actually a net negative, but we'll cover that another day) and leisure and hospitality. For those willing to proffer that employment drives rents, let me remind you that we've had negative job growth most of this year, and still, many metros report rent increases and stable levels of traffic in the properties.

Have I got your interest? Next time, how do you measure employment and what are the three `main sources of data.

Until then, happy data crunching.