What’s next for the city driven mostly by the health-care industry?
As the real estate industry was going bust in most of the country, Rochester pocketed huge gains in the market—Thanks to health-care employers like Mayo Clinic, who added hundreds of jobs in the city last year.
In February 2008 Real estate professional, Tim Williams remained optimistic when he wrote, “… We are seeing our Spring Market activity, typically beginning mid-February, and arriving earlier and earlier each year – with Spring of 2008 forecasting to be “bright, busy and sunny”. The outlook for Rochester, Minnesota to increase its population is also very strong, with an estimated 10% to 15% increase in the next 5 to 7 years. That’s a potential increase of anywhere between 10,000 to 20,000 people, all of which will be looking for condos, apartments, and homes for themselves and their families.”
But strong as it may seem, the health-care industry has its limitations. In January, the Mayo Clinic slowly went into recession as not-for-profit institutions are not spared from national economic trends. Economist Edward Friedman of Moody’s Investor Services explains, “… Now, however, the national economic slump is hitting Mayo as well. According to spokesmen, in the near term the only hiring, if any, will be for direct patient care. Research and training jobs will be frozen. … Further, charitable contributions, a major source of funds for unbilled services, are declining, which puts additional downward pressure on the clinic.”
The bad side of having a dominant health-care industry in the state economy, including the Rochester Federal Medical Center, is that new residents who do not have prior medical/health-care training will have a harder time landing a job… Take if from MSNBC’s Bill Dedman, “Recession-resistant doesn’t mean recession-proof. Now even most of those 35 metro areas are getting a case of recession, though it’s likely to be brief and less painful.”
While Rochester does not anchor its employment pool from health-care alone; IBM, the second largest employer, also cut jobs this year. That means the city will definitely not go unscathed in the real estate market before the year ends. If there is any consolation, Seneca Foods can keep up with the recession’s impact if demand for its products remains stable and thus, assure significant employment numbers. Also, medium-sized retail and hospitality enterprises should provide additional support to the employment pool. Finally, the University of Minnesota remains a major contributor to housing demand, with students, faculty, and nearby businesses stimulating increased traffic.