Last week Freddie Mac as part of the release of its financials published data on housing prices in the first quarter of this year. The data show a decline in housing prices in Pennsylvania of 1.3 percent in the first quarter of 2008, the first such decline since 1995. The fall in prices in Pennsylvania was smaller than the declines measured in 37 states, including five of Pennsylvania’s nearest neighbors.

(see a larger figure)

In another thread Sean a.k.a MrLuigi wrote:

“"Poverty" is kind of too vague a word for the multiple layers of social dysfunction that plague our city and feed into the cycle of violence. If it were simply "poverty" you could just write everyone a big check and they would stop shooting at each other over petty beefs. The young men shooting each other in this city are almost never killing each other because they literally can't afford to eat. Its a way more nefarious web of broken family structures, broken schools, chronic unemployment, drug enforcement that says "its OK to push this illicit economy into those kinds of neighborhoods, and culture of misplaced bravado and shallow materialism. If we dump everything into the word "poverty" without being more specific, its no longer targeted enough to do much good terms of figuring out the "how" of urban violence. Its not just lack of dollars that makes Philly's mean streets mean, its a very particular system of failure of the social fabric. That said there are million and one things we can do to direct people away from crime and the underground activity before they feel that their only choice. There are a million and two things to make sure they have other options once they do get caught up in it and, as eventually happens, they get busted.”

Sean, I may be reading you wrong but I find the distinction you draw between poverty and “social dysfunction” a bit too elegant.

The Center for Economic and Policy Research (CEPR) and the National Low Income Housing Coalition (NLIHC) have released a short briefing paper estimating the cost home ownership and rental costs in 20 metropolitan areas including Philadelphia.

In the following table rental costs are Fair Market Rents. Monthly ownership costs are calculated based on 75 percent of the median sale price of homes in the region and three different interest rates, 6% (low), 7% (middle), and 8% (high) on a thirty year fixed rate mortgage.

The authors argue that because ownership costs are significantly higher than rentals costs the housing market in the Philadelphia metropolitan area was one of the bubble markets.

As a follow up to both of Fabricio’s posts celebrating Dr. King’s life and work I thought I would post some information on union membership in the Philadelphia Metropolitan area as well as link everybody to some new research quantifying the benefits of union membership.

In Metropolitan Philadelphia just under one in four African Americans are members of a union.

With the national economy showing signs of a recession now would be a good time to review the employment situation in the Philadelphia region.

What if this is as good as it gets?

Wednesday new figures on employment in the region were released by the Bureau of Labor Statistics. Payroll employment in January increased over the same month a year ago by 11,000 jobs or .6%. Employment growth in January lies somewhat below a post-2001 recession peak of 1.5% achieved in the summer of 2005.

Economists Robert Shiller and Dean Baker have both argued that housing prices over the past century have more or less kept pace with the rate of inflation. In recent years however housing markets in many parts of the country experienced appreciation in housing prices that have far exceeded the rate of inflation. The Philadelphia metropolitan area (Philadelphia, Bucks, Chester, Delaware, Montgomery) is one of those areas with inflation-adjusted housing prices growing 52% between the fourth quarter of 2001 and the fourth quarter of 2006.

New data on housing prices has been released for the fourth quarter of 2007. Here is a brief summary of that new data.

In his column Paul Krugman discusses the reasons he is worried that recent efforts by the Federal Reserve to stabilize financial markets are falling short. Of particular interest is the following quote:

"First, we had an enormous housing bubble in the middle of this decade. To restore a historically normal ratio of housing prices to rents or incomes, average home prices would have to fall about 30 percent from their current levels."

The ratio of housing prices to rents is a way of trying to sort out whether housing prices are overvalued. What you’re doing is comparing prices to an estimate of the rents a homeowner could earn if instead of living in their home they rented it out. It’s calculated in the same spirit as a price-earnings ratio on a stock. The higher the ratio is relative to its long run average the more you worry that housing prices are unsustainably high. We can calculate a version of the housing price to rent ratio for the Philadelphia Metropolitan Division (PA Portion).

Enlarge the figure

There was a lively exchange here over personal and social responsibility. While I don’t wish to diminish the importance of these issues in developing social policy it is often lost in these conversations that many of the consequences of the breakdown in both personal and social responsibility often fall upon the shoulders of children.

Today a series of reports on the well being of children and youth in Philadelphia’s neighborhoods were released by Philadelphia Safe and Sound. Here are links to the first three of the eleven planned reports, Bridesburg/Kensignton/Richmond , Lower North Philadelphia and West Philadelphia.

The picture below is not exactly a Albert Yee but aesthetics aside, a picture with a story.

The question I put to all of you is what is that story? What does it imply about the health of the Philadelphia economy? Is anything missing? What doesn’t it imply? I realize that in campaign season this is like throwing red meat to hungry tigers but maybe we will learn something.

Bad news about Philadelphia’s long standing and expensive social ills is not hard to find.

On Tuesday of this week New Jersey Policy Perspective (NJPP) released Mapping the Route to Dollars: AAA Mid-Atlantic's Four-State Tour (see their Inquirer op-ed ) a report which tells the story behind the departure of the headquarters of the auto club from Philadelphia.

The headquarters of AAA Mid-Atlantic (formerly the American Automobile Association) located in Philadelphia since 1901 moved in 2005 to Wilmington, Delaware taking with it more than 500 jobs. Although only 30 miles from Philadelphia AAA Mid-Atlantic maintained that a major reason for its move was Wilmington’s more central location in the region.

NJPP tells the rest of the story behind the move.

From the Governor’s budget address on February 8th of this year.

“Second, the minimum wage must be increased in Pennsylvania and it must be increased now. The economic support for an increase is undeniable. The public will and demand for an increase is overwhelming. And the political willingness for an increase is bi-partisan. I ask you to also pass this month a minimum wage increase to $7.15 an hour effective January 2007 to show our support for the 423,000 hard working people who are struggling to make ends meet in our great Commonwealth.”

And from today’s Patriot News on whether the Senate will follow up yesterdays vote in the House to raise the minimum wage:

As the battle rages on in France over the implementation of an employment at will policy for workers under the age of 26 a new round of smugly jingoistic commentary here at home has spewed forth. The editorial page of the Los Angeles Times linked high French unemployment rates to existing labor policy and proclaimed

the youth labor law doesn't go far enough, but it's a start.

Never mind that the empirical support for this proposition in general is quite weak as Economists, Glyn, Howell and Schmitt illustrate.

A study released two weeks ago by the Economic Policy Institute and The Center on Budget and Policy Priorities found the gap between the rich and poor in Pennsylvania increased between the early 1980s and early 2000s.

The growth in incomes of the poor and middle class have lagged behind that of the wealthy. This was not always the case, from the late 40s to the early 70s the incomes of the poor, middle class and the wealthy all doubled so as the economic pie grew larger everyone benefited in equal measure. In contrast since the early 80s the average income of the bottom fifth of families grew by just 22 percent while the average income of the richest fifth of families grew by 77 percent. In the past two decades while productivity has increased the benefits of that higher productivity have disproportionately accrued to the wealthiest families.

click read more for just how out how regressive Philly's tax system is, and who it hits hard.