Housing Slowdown May Claim 800,000 Jobs Wednesday December 7, 11:03 am ET By Alex Veiga, AP Business Writer Slowdown in U.S. Housing Market Could Claim 800,000 Jobs Next Year, According to Report LOS ANGELES (AP) -- A sustained decline will hit the U.S. housing market next year, costing the nation as many as 800,000 jobs, according to a new economic report released Wednesday. The slowdown is likely to last several years, with as many as 500,000 construction jobs and 300,000 financial sector positions lost, the quarterly Anderson Forecast predicted. "We expect housing to start slowing the economy this quarter or the next," said Edward Leamer, director of the study done at the University of California, Los Angeles. "Some jobs in manufacturing might well disappear as a result of weakness in housing, but this may be offset by jobs brought home or not lost to foreign competition," he wrote. The forecast said eight of the last 10 economic recessions were started by housing market slowdowns. Though the coming cooldown will cause a drag on the nation's economy, it will fall short of triggering a recession, the forecast said. The report cited several signs that the decline could be under way: -- New construction of housing in October was down 5.6 percent from the previous month, with new construction of single-family housing accounting for a 3.7 percent dip. -- New home sales have declined. -- Applications for home mortgages have trended downward since late September as rates increased. -- In some regions, homes are remaining unsold longer and the pace of housing construction is outpacing population growth, which could spell a decline in demand. "On all these grounds, we believe housing is due for a sustained decline," economist Michael Bazdarich wrote in the forecast. "The remaining questions are how hard the fall will be and when it will begin." The forecast for California, where housing prices lead the nation and housing-related jobs have been driving economic growth, resembles the national outlook. Economist Ryan Ratcliff said the state's housing market will see a slowdown in spending along with job losses in construction and related sectors. He expects California home prices to plateau while sales and new construction see moderate decreases during two years of weak growth. "If the housing market slows more than we are expecting, a recession is not out of the question," Ratcliff wrote. Counties showing signs of a cooldown include San Francisco, where housing sales have been off 20 percent since peaking in June, 2004. San Diego County has seen sales slow about 13 percent, while monthly price gains have plummeted to low single digits. California's job picture has been lackluster in recent months. The rate of employment growth has slowed after a significant number of jobs were added in July and August. Construction has remained the fastest-growing sector. But Ratcliff predicts a slowdown in construction activity through 2007 and moderate construction job losses.
Housing market has been very hot for the past few years. I live in NYC, and see a lot of new condo buildings are being build in area that never has condos. I just wish they will build more to drive the housing market down and make it affordable again for every day people instead of for speculators only. Everything is out of control, rent is going up like crazy, you need at least 1 person to work full time just to pay off rent for a 2 room apt. I am referring to Brooklyn and Queens, in Manhattan, no such luck. The person need to have an above average salary just to cover rent in Manhattan. I am hoping a crash as interest is going up and up.
I'll be done with this assignment (outside the US) in 2 years. At that time looking to buy a house. Looks like it'll be prime pickin' right around then! W3wt!
I think hes way wrong. California prices have tripled or quintupled in the last 7 years for average to small SFH. The current prices are completely unsustainable with the currrent california job base. Unless somebody expects incomes to magically triple in the next two years then we will see prices come down. Already the exodus of people from the state is impressive - most of the people leaving the state are choosing to go because of housing prices. In the city of SanFrancisco - always one of the most expensive locations - families with children are leaving in droves. So many have in fact left the city - and the state - that San Francisco now has the smallest number of residents under the age of 17 that has ever had in its history (as a pecentage of population). Bottom line is that prices will come down, not simply plateau (wishful thinking).
Greenspan and his pack of idiots don't even pay lip service to a "soft landing" anymore. I'm pretty confident that they will have the economy in recession a year from now.
NYC and California have become the bastion of the rich from all over the world. People of means are moving to NYC, and many rich foreigners are moving to CA because of the weather. A lot of these people are wealthy business owners, or they inherited money, etc. I don't think real estate will go down that much in either area. What will change is the residents/job base. A friend of mine lives in San Jose, and that whole area has problems staffing jobs paying under $20 an hour, because nobody can afford to live there for that money. The same thing is happening in NYC, the jobs are leaving.
Actually it more like 60 per hour. Anything less than this and you are really living poorly. Companies are accelerating their leave of the state. Yes there are people moving to the coast from outside the US but the few people that do in no way make up for the problem. This rich foreigner idea sounds like something made up by realtors to convince you to take the top of the market....