Slowing Home Market to Affect Job Market
Chances are, you know at least one person who works in the real estate industry. Over the last few years, the strong real estate market has attracted many Americans looking for a career. And not just a career, but a well-paying career.
San Diego, CA (PRWEB) March 23, 2006
Chances are, you know at least one person who works in the real estate industry. Over the last few years, the strong real estate market has attracted many Americans looking for a career. And not just a career, but a well-paying career.
But over the last five months, home prices have declined steadily. Meaning that well-paid career is not so well paying anymore. Sales in Southern California hit their lowest level in five years in February, according to DataQuick.
Many agents realized that the market would not be able to sustain itself forever and left the market for other options. As the market continues to slow, there will be several agents leaving their real estate jobs, and even mortgage, appraising and construction jobs, to find something that pays better.
The job market could be impacted.
Housing has paid its part in the economy of the last few years. It helped in bringing the nation out of the last recession. Almost 40% of all jobs created in the past four years were housing related. Almost 10% of all workers in America were employed by the real estate industry at the end of 2005, according to Moody's Economy. com. The next highest industry was health care for adding more jobs.
Job growth and creation is closely tied to consumer spending. The economy will need help from other non-housing sectors to maintain its current status. A slower real estate market that results in slower job growth means that consumer spending could go down. Eventually businesses would be discouraged from spending. The housing and real estate market down-turn could be a bad sign for the economy in general.
Washington Mutual, a leading mortgage lender, has already started to deal with the slowing market by closing 10 mortgage processing centers that will put 2,500 employees out of work. In November, Ameriquest let 1,500 employees go. And economists say that the market has barely started its cool down.
January marked the fifth month of decreased existing home sales. Home builders also are reported decreased orders and new construction starts. According to leading economists, home sales are predicted to fall 8% from last year.
There are approximately 2.6 million real estate agents nationwide. According to the National Association of Realtors, the median income of an agent in business for two years or less is $12,852 during a normal market.
Many successful realtors are used to the up and down of the real estate market. They understand that there is no recurring revenue in a commission-based real estate business. The same is seen in the mortgage loan business, where you are paid based on the number of clients you bring into the company.
The downturn of the real estate market has been a soft one, as of date. Other sectors of the economy are adding jobs, such as in retail, healthcare and state and local governments. These job increases will help take up some of the slack.
Most economists expect the housing down turn to be a slow and gradual cooling.
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