Rising mortgage rates hit Southern California real estate jobs – Whittier Daily News

Bubble Watch examines trends that may indicate impending problems in the economy and/or real estate markets.

Buzz: Rising mortgage rates are taking their toll on Southern California real estate workers.

Source: My trusty spreadsheet, filled with August job numbers, examined hiring habits in the construction, real estate, and finance industries in Los Angeles, Orange, Riverside, and San Bernardino counties.

top line

Local property-related businesses added a total of 600 jobs this month and added 14,900 more workers in 12 months, a 2.3% growth. That’s a brisk increase in hiring since the pandemic lockdowns of 2020 — almost triple the average annual job growth of 0.82% since 1990.

However, the pace of hiring at these companies was slow in August, compared to an average of 1,240 new hires last year. And local bosses were hiring 1,140 workers a month in 2018-19 before we knew anything about the coronavirus.

The details

There’s a bigger “but” in the numbers.

A construction boom — in both housing and infrastructure projects — is keeping construction workers busy, though the overall hiring pace is cooling. The region had 381,600 workers building things after adding 1,800 in a month and growing by 17,700 in a year. Hiring has averaged 2,260 employees per month since the coronavirus economic slowdown in 2020.

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But workers handling real estate transactions haven’t fared as well. Rising mortgage rates in 2022 pushed home buying down to Great Recession levels. These interest rates also dried up homeowners’ ability to refinance mortgages. Higher financing costs reduce the lucrative business for real estate sellers and lenders alike.

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For example, employment at real estate and financial firms fell by 1,200 to 293,600 in August – a fall of 2,800 in one year. That’s a sharp reversal from the pandemic-era hiring average of 400 per month when jobs were recovering.

A different view

Let’s think about employment this summer compared to before the pandemic era.

August employment for all real estate-related companies in Southern California was right back to where it was before the coronavirus outbreak. But it’s a split picture: construction was up 3% from February 2020 levels versus 4% among real estate and financials.

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Compare these patterns to August employment in other key Southern California employment niches compared to February 2020. Industries above pre-pandemic staffing include transportation/warehousing (up 20%), health and social services, and business services (up 3% ). and retail (up 1%). Sectors still catching up: restaurants (down 1%), manufacturing (down 3%), recreation (down 8%) and hospitality (down 20%).

regions within the region

Hiring also varied geographically in August in construction, real estate and finance…

Los Angeles County: A slight slowdown with 324,800 workers after adding 400 in a month and growing by 7,900 in a year. On average, 1,176 recruitments were hired per month to bring LA jobs to 99% of February 2020.

Orange County: Still warm with 199,400 workers after adding 900 in a month and growing by 2,800 in a year. On average, 610 recruitments were hired per month, accounting for 99% of pre-pandemic days of OC jobs.

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