Friday, October 14, 2005
Follow The Jobs In Housing Slowdown
thehousingbubble2.blogspot.com
This Business Week article looks at who will feel the housing slowdown the most. "If the housing market turns south, where is the economic damage likely to be the greatest? Places where prices fall a lot will feel the hit, of course. But the greatest economic impact may not come where prices slide the most. Instead, the regions that see the most pain probably will be those where homebuilding has been a major source of new jobs."
"The most vulnerable spots, according to a new analysis by BusinessWeek, include the Riverside-San Bernardino (Calif.) region, the so-called Inland Empire east of Los Angeles, San Diego, Phoenix, and Las Vegas. In each of these areas new jobs in construction accounted for over 20% of total payroll growth in the past year, vs. a national average of 10%."
"While construction by itself accounts for 33% of new jobs in Riverside and San Bernardino, that share reaches 39% when jobs in lending, real estate commissions, renting, and leasing are included."
"In the East, regions that depend heavily on construction employment for growth include Tampa-St. Petersburg and greater Baltimore. Patrick J. O'Keefe, CEO of the New Jersey Builders Assn., says housing starts are running at their highest since 1988 even though the state economy is in a lull. 'In the face of a slowdown, it's hard to say which other sectors of the economy would step up to maintain current employment levels,' says O'Keefe."
"Nor is the construction-related job boom solely a West Coast phenomenon. Across the country, in the Baltimore-Towson (Md.) metro area, construction jobs grew 3.7% over the past year even though open land is far more sparse than out West. Not surprisingly, related industries are also soaring. The Maryland Association of Mortgage Brokers, for instance, has swelled to 1,500 members, more than triple the number a decade ago."
"Regions that are heavily dependent on housing for employment growth will suffer more than most when a downturn comes. And there's no doubt that a reversal in the market will come eventually. Falling home values are no fun anywhere. But if you want to know which metro areas will really take it on the chin when prices stall out, look for the ones whose jobs depend on it." |
