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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (26478)2/16/2005 12:20:56 AM
From: CalculatedRisk  Read Replies (1) of 110194
 
Excellent chart. If (when) we have a RE slowdown, it will probably have a significant impact on employment and aggregate income. From that chart, we have added 200K jobs in the mortgage industry alone in under 4 years. The mean salary (according to the BLS in 2001) was $45,380 for the mortgage industry. If we lost those jobs (returning to pre-2001 levels), we would lose $8 to $9 billion in aggregate income ... just from layoffs in the mortgage industry.

California alone has added 99,281 RE agents over the same period. Many of those people only work part-time, but that is still a substantial loss of income (if RE volumes drop 30 to 40% - like a typical RE slowdown).
dre.ca.gov

And then there is Construction. Many of these jobs are reasonably high paying - and we have added 300K jobs over the last 4 years. And that figure doesn't include the impact of illegal immigrants, working in the construction trade, losing their jobs (the loss of their income will ripple through the economy too).
bls.gov

We could add escrow, title, and many other jobs on the periphery of RE. And those are just the jobs directly impacted by a slowdown.

Then there are the secondary effects (the vendors for the above businesses) and the tertiary impacts (restaurants, retailers, etc.) that suffer as aggregate income falls.

I think many people are underestimating the impact of a RE slowdown.
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