This project investigates the effects and consequences of the Great Recession and the Covid 19 pandemic on the economy. The dimensions chosen for this project to study these effects and impacts are real estate and unemployment. Furthermore, the states of California, North Dakota, and New York were chosen for statistical purposes such as comparison. The three states have distinct characteristics, such as a high unemployment rate and a high rate of real estate investment. The assignment aims to create a complete, cohesive, and persuasive set of visualizations that convey meaningful insights about differences, such as the impact of real estate and unemployment rates in California, New York, and North Dakota. This research aimed to look into the effects of the Great Recession (1986-2011) and Covid 19 (2012-2022) in the three states mentioned above. The Great Recession and Covid 19 significantly impacted the economies of the three states and the United States as a whole.
The Great Recession and the COVID-19 pandemic significantly impacted the economies of North Dakota, California, and New York. Unemployment rates increased substantially while the housing index, rental vacancies, and house sales fell. California and New York were particularly hard hit, with high unemployment rates and falling housing indices. The Great Recession is a broad-based and extended decline in a nation’s GDP-measured economic activity. Between December 2007 and June 2009, 18 months, the United States experienced the start of the Great Recession. It was primarily brought on by the demise of the mortgage market, which increased the number of mortgage defaulters and decreased lending in the global banking industry. Real estate values were rising steadily before the Great Recession. People were encouraged to invest in real estate, leading to a residential construction boom.
At the epicentre of the Corona pandemic, some areas saw a decrease in the housing index and rental vacancies, while others saw an increase in demand for housing. That is, the Great Recession of 2007 and 2009 and the COVID-19 pandemic significantly impacted the economies of North Dakota, California, and New York, resulting in substantial changes in unemployment, housing indices, rental vacancies, and house sales.
Effects of Great Recession on Employment Rate
The Great Recession occurred between 2007 and 2009, causing the most significant economic destabilization in the United States. Although the economy fluctuates regularly, the recent downturn lasted longer. Such an occurrence had not occurred since the Great Depression of the 1930s. The impact of the Great Depression resulted in a decrease in GDP, an 8% decrease in median family income, and a 6% decrease in the number of jobs.
From the visuals, the unemployment rate in all three states (California, North Dakota and New York) rose from 2007- 2010. There was a high unemployment rate from 2007 to 2010 due to the effects of the fantastic Recession in all three states. The high unemployment is a result of the financial crisis related to the mortgage crisis in 2007. Thus, the Great Recession in the US led to high unemployment in all three states.
This study focused on financial results that resulted in significant unemployment and poverty. The Recession considerably influenced social, economic, and political elements (Farré et al., 2018). As demand and output fell, enterprises halted hiring, while others were forced to lay off workers, resulting in unemployment. The unemployment rate impacted the economy in such a way that individuals lost income and experienced several obstacles that harmed their health. The conclusion reached was that unemployment and Recession went hand in hand.
The Great Recession led to the deprivation of job opportunities and the closure of companies, which were several individuals’ primary sources of income (Ferrari, A). Employees who did not receive layoffs received low salaries (Grusky et al., 2011). Besides, the production companies had to cut back on some finances due to the low production and low sales of finished products. The Great Recession hurt the lifestyle of the people. Low income and wages influence individuals to live a relatively more straightforward life than before 2008.
In conclusion, the unemployment rate for all three states has decreased since 1986, and from the figures and visuals, the year before the Great Recession had the lowest unemployment rate. The unemployment rate started to rise during the financial crisis. The high unemployment rate was caused due to the Great Recession.
Effects of Covid 19 on the Unemployment rate
The economic effects of Coronavirus are indeed pervasive. Although the pandemic’s immediate effects are centred on the health sector, it adversely affects the economy. This is due to the measures such as curfews and movement restrictions that were put in place to curb its spread. From the visuals, it is evident that the pandemic has had significant impacts on employment.
The visuals show the unemployment rate for the period 2012-2022. This is the pre and post covid 19. This aims to study the effects of covid 19 on the unemployment rate for the states chosen above (California, North Dakota and New York). From the visuals, before the covid 19 pandemic, the unemployment rate decreased in all three states. In the three states, the unemployment rate was the lowest in 2019. In 2020, there was a drastically high unemployment rate due to the covid 19. This high rate of unemployment is due to the effects of covid 19.
Effects of the Great Recession on Real estate
The housing industry mainly felt the effects of the Recession on numerous levels. When the GDP and financial economy of the most renowned and established economies fell, for example, the US GDP declined by around 3.6 per cent, construction product costs fell, followed by the usage of cheap alternative construction materials. Building and housing values declined, especially those built before the Great Recession of 2008. Furthermore, the drop in wood products and housing prices has reduced building permits (Ferrari, A). Many people who would have benefited from the construction of new structures to offer housing, particularly immigrants, have been denied the opportunity to do so. Individuals whose primary source of income was the issuance of permits, real estate operations, or the construction of new buildings were harmed by the Great Recession of 2008.
From the visuals, it can be seen that the housing price index fell for all three states due to the Great Recession. The Great Recession affected real estate investment mainly. Before the Recession, the housing index was at a high value due to the high demand for houses and the profitable real estate business. It can be concluded that the Great Recession greatly impacted real estate investments (both the rental vacancy rate and the housing index). The rental vacancy rate dropped.
In conclusion, Millions of people’s lives were upended during the Great Recession, as housing prices and stock portfolios plummeted and unemployment rates skyrocketed. Individuals who lost their jobs were the first to feel the effects of the Recession. The Recession was the worst because the impact was felt; even after the Recession was declared over, there was still a drop in employment.
Effects of covid 19 on Real estate
Covid-19 had widespread repercussions across various industries, including the real estate markets. Preceding COVID-19, the basics of land were solid: rent action, adequate money, and high influence proportions. From the visuals, we can see that the housing price index dropped in the year 2020. This is caused by the effect of covid 19 on real estate. In all three states, the rental vacancy rate dropped in 2020.
In conclusion, the pandemic has affected the real estate industry. The market seems to revive after COVID-19 since demand has been muted due to low-income levels and a shift in perspective investors’ priorities. Businesses and people’s disposable incomes are projected to be cushioned by the government’s solid budgetary policies.
References
Farré, L., Fasani, F., & Mueller, H. (2018). Feeling useless: the effect of unemployment on mental health in the Great Recession. IZA Journal of Labor Economics, 7(1), 1-34.
Grusky, D. B., Western, B., & Wimer, C. (Eds.). (2011). The great Recession. Russell Sage Foundation.
write