Statewide, 116,000 jobs were cut in February, bringing the California unemployment rate to 10.5%. Reminiscent of the numbers seen during the painful 1980s recession, economists say the unemployment rate could break 11%. Until job losses stop and job growth begins, the housing market of sales and occupancies will not bottom out nor begin to recover.
first tuesday take: Joblessness is a condition no property manager or single family residence (SFR) sales agent wants to exist since every job lost is a family or individual who cannot or will soon not be able to afford their rent or mortgage. Thus, property managers and SFR sales agents will be faced with a diminished base of clientele to deal with who can afford shelter.
Agents have expectations about their future income, but they need to be realistic. Realistic expectations are based on the best forward-looking information they have access to. Job loss is not a leading indicator of the economy, but a mere reflection of the economic conditions of the past several months. However, for agents, the current job loss rate is their forward expectation for earnings from property management, leasing activities, and home sales–and the picture is fairly clear for the next 18 to 20 months.
Job losses will increase with fewer and fewer Californians employed until the end of 2010. In the meantime, the rate of job losses will increase through mid-2009 and reduce in amount into 2010, with 2011 a bottoming-out year with no further job losses. Then we can expect stability for about 12 to 18 months before businesses start hiring again to produce an increase in the number of employed people in California, which in turn triggers an increase in the number of potential renters and homeowners, i.e. a rising market.
Re: “California jobless rate climbs to 10.5 percent” from the San Francisco Chronicle