Monday, February 4, 2013
Job Market Savior: Real Estate?
The job market, like the real estate market, has experienced some hardship over the past few years. This hardship began with the economic collapse and has continued through what we have seen to be a slow and painful recovery. Recently, however, the real estate market has been much more stable and is consistently heading in the right direction. Obviously this is a very good sign for real estate itself, but what other effects can we expect from a strong and growing real estate market? Can the upcoming strength and security of the real estate market have an effect on the dismal job market we have been experiencing? The answer is a simple YES! Although, since I am not an expert on the job market, I will give you the opinion of a much more credible source. When asked about new job creation, "the most promising news is related to the housing market," says John Challenger, CEO of employment consulting firm Challenger, Gray & Christmas.
Now that we know the real estate market WILL help the job market, the question now is, HOW will the real estate market boost the job market? When it is broken down it becomes quite simple. In the past, a strong real estate market tends to lead to increased hiring in housing related industries. The reason the real estate market has such an impact on the job market is because there are a lot of housing related industries. These industries include carpenters, loan processors, landscapers, real estate agents, appliance manufacturers, furniture makers ... just to name a few.
If the real estate market can continue to grow and gain strength then we should be seeing our job market do the same. Now, just to back up what I have been saying let me show you a few hard facts supporting my claims. "Since reaching a low in January 2011, construction employment has grown by 296,000, with one-third of the gain occurring in the last four months," according to the Bureau of Labor Statistics. In January alone, the construction industry for housing added 28,000 new jobs. According to the National Association of Home Builders, for every home start, three new jobs are added in industries such as lumber, concrete, lighting fixtures, and lending. If the housing market can rebound to its historical average, the economy could generate 2.9 million direct jobs from it, according to the Bipartisan Policy Center, a Washington think tank.