December 5, 2016

November Geo Scores and Insight: A Look Back at the Swing States

This week we bring you the November 2016 DIVER Geo Scores.  DIVER Geo Scores are designed to quickly communicate the overall economic health of a selected geographic area on a scale of 0 to 10.  The Geo Score reflects the relative economic well-being of the location and is available for all States, counties, and approximately 350 of the largest cities.  Calculations are released monthly and are based on multiple, meaningful economic and demographic data from the employment, income, and housing categories.

Top/Bottom Movers at the State Level

The table below, on the left, highlights the States with the highest Geo Scores for November 2016, and the table on the right highlights those States with the greatest year-on-year increase in their Geo Score.  Of those States in the Top 10, all but Minnesota maintained or increased their Geo Score from prior months.  Washington logged the largest gain (+2.2) and Hawaii made the cut as #10 for the largest year- on-year gain.

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Next, we look at the States with the lowest Geo Scores and those with the largest decline.  Before we get into further analysis, it is worth noting that Minnesota, a Top 10 Geo Score, saw a significant decline year-on-year.

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We now take a closer look at the States that have been in the category of most significant decline year-on-year throughout 2016 — Louisiana, Wyoming, Alaska and Delaware.  Alaska, Louisiana and Wyoming have seen diminishing employment conditions with declining employment and labor force deterioration while Delaware has seen its housing conditions decline.  Moreover, per the National Association of State Budget Officers State Expenditure report, each of these States had a decline in their estimated general fund revenue for fiscal year 2016 (see below).  For ready reference, we also provide the ratings of the three major raters for these four States.

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Source: National Association of State Budget Officers

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Source: Moody’s, S&P and Fitch Rating

County Level Movers

At the County level, those with the largest increase in their Geo Score were most influenced by a strong housing and employment market with marked declines in foreclosure activity and increases in the labor force participation rate.  For counties that saw the largest decline in their Geo Score, all but three saw a decline in the employment, housing, and income factors.  It is worth looking at these counties and, for those readers that have access to DIVER Analytics, we encourage you to run the filter tool against your portfolios for these bottom dwellers and further assess the credit.

City Level Movers

At the City level, we saw an improvement in employment and housing data as drivers for almost all cities with the 25 greatest increase in their Geo Score.  Most of these cities are seeing an increase in the labor force participation rate – a strong employment indicator (more so than the unemployment rate from our perspective).  For the 25 cities that saw the largest decline in their Geo Score, most saw declining housing and employment data as well as declining wages.  As noted above, it may be worth running the DIVER Analytics’ Filter tool against positions held.

A Closer Look at the City Level Housing Price Index

Last week, the Federal Housing Finance Agency released the 2016 third quarter House Price Index. Among the most populated cities, we note the weakest gain (not a decline) was New Haven, CT with a 0.4% increase.  By contrast, Auburn, Tacoma, Kent, and Renton (all in Washington State) have improved more than 10% since last year.  Additionally, Florida (the Sunshine State) has seen a fast pace of growth for housing prices with some local areas such as Fort Myers, Palm Bay, Melbourne, and Port St. Lucie seeing significant improvements.

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Source: FHFA; DIVER Data Services

Swing States – A Look Back

Last month when we released the October Geo Scores, we offered the below table highlighting which candidate was favored based on the State’s Geo Score or the Geo Score’s trend.  We know who won the electoral vote.  Amongst the Swing States, six went to Trump and four to Clinton.  Amongst the more influential swing States, Trump claimed Pennsylvania, Michigan, Ohio, and Florida.  Maybe the economy does matter.

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Have a great week.

Jane Ma and Gregg Bienstock

2017-10-26T13:37:52+00:00