Real estate employment in Southern California fell by two-thirds in one year as the Federal Reserve’s tight monetary policy curbed real estate business.
I looked up state employment statistics for August in my trusty spreadsheet and found that there were 921,800 real estate workers in Los Angeles, Orange, Riverside, San Bernardino, and San Diego counties. Local real estate jobs have increased by 9,500 jobs in the past 12 months, 65% slower than the 27,000 annual increase during the pre-pandemic period of low prices from 2015 to 2019.
Now consider other industries across Southern California that have added 133,800 jobs over the past 12 months. This is a 1.6% increase compared to a 1% increase in real estate.
Don’t forget that the Fed began cooling the overheated economy by raising interest rates in March 2022. So it’s not too surprising that real estate jobs in Southern California are 9,300 jobs below the peak set for July 2022. Note that many people working in the real estate industry are self-employed and are not tracked by traditional government employment numbers. .
In September, the Fed reversed gears and began lowering central bank-controlled interest rates. How will industry employers react if these moves make real estate financing cheaper?
slice by slice
Consider how Southern California’s real estate niche jobs have fared since the Fed’s inflation war sent mortgage rates soaring to 20-year highs. Look at how depressed some professions are…
Lending: 104,100 people work in various sectors of the long-suffering credit industry. Employment is down 40,800 from December 2012, when it hit a post-Great Recession high. Over the past two years, refinances have disappeared, home purchases have slowed dramatically, and mortgage customers’ needs have further decreased.
Building Supplies: 61,800 equipment and materials vendors, 5,800 below post-Great Recession high (June 2021). Home renovations have slowed down significantly.
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Real estate services: 143,900 people handling transactions – 3,300 people below post-Great Recession high (December 2022). The less you buy, the less processor you need.
Trade construction professionals: 318,100 people employed by contractors – 1,600 fewer than after the Great Recession (October 2023). Many local projects have been put on hold awaiting cheaper financing.
Building services: Employment in commercial real estate operations was 138,900, just 200 jobs below the post-Great Recession high level set in July. Employees returning to offices is helping this niche market.
Project construction: 155,000 people work at companies that build homes up to highways, the highest level since the Great Recession. The drive to improve infrastructure, especially roads, is further expanding this niche market.
geographically speaking
Breakdown of real estate employment by metropolitan area in August also reveals Fed cooling…
Orange County: Real estate employment was 219,400, 11,000 below its post-Great Recession high (August 2018) as mortgage lenders were hit hard.
Los Angeles County: 348,400 real estate jobs – 7,000 jobs below post-Great Recession high (February 2020).
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Inland Empire: 184,100 real estate jobs – 2,000 below post-Great Recession high (October 2023).
San Diego County: 169,900 real estate jobs, the highest level since the Great Recession.
Jonathan Ranzner is a business columnist for Southern California News Group. Please contact us at jlansner@scng.com.
