WASHINGTON -- San Joaquin Valley cities remain mired in the great economic meltdown, though a new study shows how some are suffering more than others.
High unemployment, devastated housing prices and rampant foreclosures still keep Modesto ranked near the very bottom among 100 metropolitan regions evaluated by Brookings Institution experts. Fresno fares slightly better, though it's not exactly soaring.
"Things are still bad, but they aren't as bad as they were at the beginning of the year," study author Alan Berube stated, adding that conditions "have moderated in most metropolitan areas ... but there is still a great deal of variation."
For San Joaquin Valley residents long accustomed to uniformly grim economic report cards, the latest assessment from Brookings' Metropolitan Policy Program offers a somewhat nuanced message: The Valley's pain is deep but not distributed equally.
Fresno, in particular, has been having relatively fewer home foreclosures of late. Consequently, while Fresno has joined the likes of Sacramento and San Jose among the 20 cities listed in the tier of "second weakest" metropolitan areas, Modesto and Stockton still count among the nation's "weakest" areas, as defined by the Brookings study.
Most tellingly, a 20.6 percent decline in housing prices since last year ranked Modesto 99 out of 100 cities nationwide. Fresno ranked 92nd, with a 16.6 percent housing price decline.
"Our assessment has (also) been that Fresno has fared somewhat better than its Northern San Joaquin Valley neighbors," agreed Jeffrey Michael, director of the Business Forecasting Center at the University of the Pacific's Eberhardt School of Business. "The first year of the recession hit harder in Modesto and Stockton, and the recession was later arriving in Fresno."
Michael's own latest forecast predicts that the Valley's recovery will lag behind the rest of California. He estimated unemployment will peak in the first half of next year at 17.9 percent in Modesto and 17 percent in Fresno before starting to subside. In part, Michael noted, the Northern San Joaquin Valley communities will be coping for a while with the aftershocks from the closure of the NUMMI auto plant in Fremont.
The subtle contrasts among cities along the State Route 99 corridor, in turn, are much smaller than those between the region as a whole and other, more economically dynamic areas.
"Differences in economic performance among metropolitan areas remained stark," the new Brookings study notes.
In this recession, success is strictly relative.
For instance, Omaha's unemployment rate of 5.4 percent in June increased over the past year, but only by 1.7 percent. This ranked Nebraska's largest city at or near the top among areas evaluated by Brookings' economists.
Modesto's unemployment rate in June, by contrast, was 16.5 percent. This was second worst in the nation among all metropolitan areas, ranking above only Detroit. Always high, Modesto's unemployment rate had increased 5.8 percent over the prior year.
Of the bottom five metropolitan areas nationwide with the highest June unemployment rate, four -- Modesto, Stockton, Fresno and Bakersfield -- are in the San Joaquin Valley.
Fresno's unemployment rate of 15.3 percent in June marked a 5.7 percent increase over the prior year.
While Modesto and Fresno have horrific unemployment in common, they diverge somewhat in foreclosures.
The foreclosure pandemic has left Modesto with the third-highest percentage of bank-owned properties among all metropolitan areas nationwide. Fifteen out of every 1,000 properties in the Modesto area have been taken by banks, the study shows.
In Fresno, by contrast, only about seven out of every 1,000 properties had been taken over by banks as of June. The pace of foreclosures also continued to be notably higher in Modesto than in Fresno between March and June, analysts found.
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