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March 31, 2009

Are there any safe areas?

This recession has affected almost everyone - households, businesses as well as communities. Focusing on communities, are there any that have seemed to fare better than others during this downturn?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"That's a real interesting question, and a study came across my desk that looked at communities in California. Of course, California, a very big state, has had major economic problems, like most of the states. And what this study found is that, yes, there were some communities that are actually faring fairly well during this recession. They are communities composed number one, of a high percentage of retirees. And they're composed, number two, of areas that have not grown very fast recently. Now why would those two characteristics actually help a community during this recession? Well, if we think about retirees, they are dependent upon their pensions, not on jobs, so you're not going to have layoffs for retirees. Now obviously many retirees have seen their retirement money hurt during this recession, but I think in general most retirees have fared better than the public at large, who have suffered big job losses. Secondly, communities where there's been very little recent growth . . . those are areas where there's less likelihood of housing problems since most of the homeowners there would have bought their homes a long time ago, not within the last 3 or 4 years. And those folks who have bought in the last 3 or 4 years may be the ones who have problems. This is not to say that these communities are not facing issues, but probably as we look around the country, these communities - more so that others - have been safe havens during this recession."

Posted by Dave at March 31, 2009 08:00 AM