Home News Rising mortgage rates hit Southern California real estate jobs – Orange County Register

Rising mortgage rates hit Southern California real estate jobs – Orange County Register

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bubble watch‘ delves into trends that may indicate upcoming economic and/or housing market problems.

Buzz: Rising mortgage rates are hurting real estate workers in Southern California.

sauce: Filled with August state employment statistics, my trusty spreadsheet looks at hiring trends in construction, real estate, and financial businesses in Los Angeles, Orange, Riverside, and San Bernardino counties.

top line

Overall, local real estate companies added 600 jobs in one month and grew by 14,900 in 12 months, or 2.3% growth. This is a strong year in recovery from the 2020 pandemic lockdown and almost triple the average annual employment growth of 0.82% since 1990.

However, hiring pace at these companies slowed in August compared to the average monthly addition of 1,240 workers over the past year. And local bosses added 1,140 employees each month in 2018-19, when they knew nothing about the coronavirus.

detail

There is a bigger “but” in the numbers.

A construction boom in both housing and infrastructure construction has slowed overall hiring, but construction workers are busy. In the region, in a month he added 1,800, in a year he added 17,700, after which 381,600 workers were making things. Recovery jobs since the 2020 coronavirus economic downturn averaged 2,260 per month.

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But workers dealing with real estate transactions are doing just as well. A surge in mortgage rates in 2022 has slashed home purchases to Great Recession levels. These interest rates have also drained homeowners’ ability to refinance their mortgages. Rising financing costs cut lucrative business for property salespeople and lenders.

As such, real estate and finance company employment fell by 1,200 to 293,600 in August, down 2,800 in a year. This is a sharp reversal from employment, which averaged 400 per month when pandemic-era employment recovered.

another view

Consider how this summer’s jobs compare to pre-pandemic.

August hiring for all Southern California real estate businesses was back exactly where it was before the coronavirus hit. The construction industry is 3% higher than his February 2020 level, while the real estate and financial firms are down 4%.

Compare these patterns to August hiring and February 2020 hiring in other key Southern California employment niches. Industries that outperformed pre-pandemic staffing included transportation/warehouses (up 20%), medical and social services and business services (up 3%). and retail (+1%). The restaurants (down 1%), manufacturing (down 3%), recreation (down 8%) and hotels (down 20%) industries are still catching up.

A region within a region

Employment also changed geographically in August in construction, real estate and financial…

Los Angeles County: After adding 400 people in a month and an increase of 7,900 in a year, it is slightly down at 324,800 workers. Recovery jobs are averaging 1,176 per month, and LA job openings are at 99% of what he was in February 2020.

Orange County: After adding 900 in a month and 2,800 in a year, we are still doing well with 199,400 workers. Recovery jobs are averaging 610 per month, with OC jobs reaching 99% of his pre-pandemic days.

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