Burlington, Vermont - September 23, 2011
The harsh reality of the recession was put into numbers Thursday, and Vermont saw the largest drop in average household income in the country.
"This is a view in the rearview mirror during a time that covered the free-fall," economist Jeff Carr said.
At the peak of the recession in 2009 Vermont saw an unemployment rate of over 7 percent-- the highest in almost 20 years. And less work means less money.
Nationally there was a 2.2 percent drop in average household income to $50,000. In Vermont there was a 6.1 percent drop to $49,000 per household, meaning fewer people can afford their homes.
"We are not seeing any decline in home prices on average in Vermont. Now we aren't seeing any decreases in rent prices, in fact we are seeing consistent rent increases," said Leslie Black-Plumeau of the Vermont Housing Finance Agency.
Black-Plumeau said before the recession the average household could afford a $175,000 house, but with this income drop that price averages around $164,000, with a monthly mortgage payment of $830, for those who can find affordable financing. But Carr expects the decreasing value of existing homes to slow down.
"I absolutely guarantee you we will have another housing price boom and the timing of that will be as soon as we forgot what it was like to be in this," Carr said.
As of August, Vermont was at 5.9 percent unemployment. Carr says the new numbers showing how much income Vermonters lost are continuing to fuel uncertainty in the job market.
"Business people hire when they see something fundamentally positive in their marketplace. A lot of business people, while they are strong, their balance sheets are good, they have worked down their debt, do not see the next 6-9 months as being all that positive," Carr said.
And the rollercoaster of the stock market has made it especially difficult for Vermont to bounce back.
"Vermont is one of the largest states in terms of its percentage of income that is nonwage income, meaning it comes from places like the stock market and other forms of capital gains. No surprise there is pressure from that," Carr said.
And Carr says the billion dollars in devastation to our state after Irene did not help, adding even more detours along the path to recovery.
