DiNapoli Report: Long Island Economy Shows
Rapid Wage Growth; Steady Job Growth
Report Cautions That Wall Street Job Losses, Collapse of Subprime Mortgage Market Could Have a Significant Impact on Long Island Economy
New York State Comptroller Thomas P. DiNapoli today released a report on Long Island Economic Trends showing that 2006 wages on Long Island grew at their fastest rate this decade. The report also showed that Long Island added jobs during the first 10 months of 2007, but cautioned that projected Wall Street job cuts, stemming from the collapse of the subprime mortgage market, could have a significant impact on the Long Island economy.
“ Long Island, with its highly skilled workforce, low unemployment rate, higher-performing school districts and lowest crime rate of any large metropolitan area continues to demonstrate that it is one of the nation’s most attractive regions to live and work,” DiNapoli said. “At the same time, the region’s successes have also contributed to the challenges Long Islanders face today. While the region has among the highest household incomes in the nation, it is also one of the most expensive housing markets. The recent housing slowdown has revealed that some Long Island borrowers, without the cushion increased home prices provide, may have spent beyond their means.”
According to the report, wages grew by 4.9 percent in 2006, the highest rate in this decade and well above the 2006 average rate of inflation of 3.8 percent. Wages in Suffolk County grew by 6.5 percent in 2006 while Nassau County wages grew by 3.4 percent. The number of jobs on Long Island increased by a modest 0.8 percent, which exceeded the rate in most upstate regions but lagged behind growth in other downstate regions.
In regards to housing, the DiNapoli report showed that Long Island had a home ownership rate of 85.7 percent, the second highest among the nation’s largest metropolitan areas. While other regions of the nation have experienced large price declines, Long Island’s residential housing market is only now beginning to show signs of slowing down. The median home sales price in September 2007 was $415,000, still among the highest in the nation. As a result of relatively high home prices and increased demand for housing in both of Long Island’s counties, many borrowers increased their reliance on subprime mortgages. Subprime mortgages increased from 14.5 percent of all mortgages originated in 2004 to 30.3 percent in 2006.
Other highlights of the 2007 Long Island Economic Trends Report include:
- According to the Long Island Association, the Long Island economy had the 17 th highest gross regional product in the nation in 2005
- Long Island ’s unemployment rate averaged 3.8 percent during the first ten months of 2007 (less than both the statewide and national averages)
- In 2006, Nassau County ranked 10 th ($85,994) and Suffolk County ranked 29 th ($76,847) in terms of household income in the nation
- Long Island housing prices more than doubled from 1999 to 2005, but growth slowed in 2006 and prices have begun to decline in 2007
- Subprime mortgages accounted for 30.3 percent of all 2006 mortgage originations on Long Island, the highest concentration of any region in the state
- The 2.8 million Long Island residents account for 14.7 percent of the state’s total population
- The average one-way commuting time in 2006 (31.1 minutes) ranked 7 th among 376 metropolitan areas nationwide, and was one quarter longer than the national average.
- Reported crime on Long Island was 19.2 crimes per 1,000 people, significantly lower than the statewide average and half the national average.
- In 2006, 35.3 percent of the Long Island population aged 25 and older had at least a college degree, significantly higher than the state and the national rates.
Click here for a copy of the report.