Since the financial crisis and the Great Recession that followed, the Rochester metropolitan economy has performed admirably. Among the 100 largest metro areas nationwide, it has consistently ranked in the top half-and at times has been rated among the best.
The reason why is no great mystery: While the local economy has not grown by leaps and bounds, many other metros fell off a cliff in 2007 and 2008-especially those that, unlike Rochester, had been carried aloft by the housing bubble.
A Federal Reserve report released Monday provides important new detail about the severe economic damage caused by the financial meltdown and the housing crisis that precipitated it. The report should be read by anyone who wants to understand why the recovery nationwide has been so frustratingly slow and why metro Rochester did better than many regions in weathering the storm.
How devastating was the impact of the financial crisis and recession for the average American? According to the Fed’s Survey of Consumer Finances, median family net worth plunged nearly 40 percent from 2007 to 2010-wiping away nearly two decades of financial gain.
In hard numbers, median family net worth dropped from $126,400 to $77,300. At the same time, median family income fell from $49,600 to $45,800, a decline of nearly 8 percent.
Net worth dropped so much more sharply than net income because of the housing crash. Median home equity for families that owned homes fell 32 percent, from $110,000 in 2007 to $75,000 in 2010.
The Fed report does not drill down to the metropolitan level, but other data sources provide a rough comparison for Rochester.
While local per-capita personal income declined in 2009 amid the worst of the recession, by 2010 it had increased again to $39,919 from $37,466 in 2007, U.S. Bureau of Economic Analysis data indicate.
Meanwhile, the Zillow Home Value Index shows Rochester metro home values actually increased slightly from December 2007 to December 2010.
The challenge for Rochester now is to capitalize on its relative strength and stability. For the nation, the task is much more daunting-to continue the long climb out of an enormous economic ditch.
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