Matt Yglesias has a post up noting an overlap between those cities with high numbers of job openings per capita, and those cities with high housing prices. Yglesias writes:
This means that it may be very difficult for the typical American to afford to relocate to the Bay Area or the DC-Baltimore area even though these are places where jobs are plentiful. Charlotte and Cleveland are both considerably smaller, so the high ratio of job opportunities to people represents a small total number of jobs, but moving to those cities is a much cheaper proposition.
But a Los Angeles Times story from yesterday suggests that even moving to Charlotte or Cleveland may be too expensive. The problem is not the prices of the homes where the jobs are, it’s the prices of the homes where the jobs aren’t:
Charles Mills can barely afford to stay here. But he also can’t afford to move.
That’s why the 44-year-old heavy-equipment operator was preparing to leave his wife and young daughter here and go where he could find work — the Oklahoma oil fields. Mills has a mortgage to pay, even if its size pains him.
He purchased his house in 2006 for $308,500. Current value: $105,797.
“We talked about it: What can we do with the house?” Mills said. “Nobody’s going to buy it. Nobody’s going to rent it. If we walk away, my credit’s shot. We’re stuck.”
This may be the biggest reason why we still have 9% unemployment despite the fact that job openings are at an all time high. People can’t afford to move from where the jobs aren’t to where the jobs are.
Instead of allowing real estate markets to clear, and then ameliorating as much pain as possible after that, President Obama has stretched the pain out as long as possible for the sole benefit of Wall Street. Is there a bigger example of liberalism’s failure than HAMP?