This advice is contrary to my personal experience. I live in a part of the US with a similarly craptastic market for programmers. In a recent job search, with very little formal experience as a software developer, I was turning down offers and taking my pick of interesting positions. From what I could gather this was almost entirely due to a github page with lots of code and a portfolio of interesting projects.

However I originally did think the market looked like you describe until I realized this amazingly valuable insight: My resume was almost instantly rejected by any company where an HR person/recruiter got my application; Any company where an engineer was the first to read my resume I was eagerly contacted in less than a week. A related insight: I don't want to work for companies where engineers aren't doing the hiring.

I also had no interest in moving and found, much to my surprise, that there are a lot great telecommuting options out there these days.

edit: I just want to clarify the tone/message here a bit, I'm not saying "your doing it wrong" but that it's easy to be discourage by being rejected by companies that aren't worth your talent. There was definitely a point in my search where I felt completely doomed, but then I realized that I actually wasn't aiming high enough and was underselling myself.