As you can see with this chart, we have growing spread between employment and the labor force. (what the unemployment rate tracks).  This shows us we have approx 122,728 unemployed in the labor force in the Twin Cities 7 County region.  Assuming we could get to full employment, that is a lot of demand for housing.  But let’s just calculate the difference between Jan 2005 and Jan 2011, that is approx 55,259 additional unemployed workers in the Twin Cities 7 County metro region.  Not all of them will buy or rent housing, but a lot of them will.  Keep in mind, we have approx 26,000 properties for sale in the Twin Cities metro region…  If we use the old ratio of 1 housing unit to every 2 jobs (a number I pulled out of thin air..) we end up with demand for approx 27,629 housing units more than depleting our all of our supply. (double-check my math! I might have miscalculated on the back of a napkin here..)  If  that were to happen, builders would need to build approx 20,000 housing units to allow for immigration, new household formations, and move-up buyers.   If employment turns around quickly, we could end up with a housing shortage.  Not that we should be holding our breath right now, doesn’t look like anything promising that direction on the horizon yet..

Increasing employment is the only way this market will recover…