20% of OC Jobs in RE

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<p>We keep hearing that 20% of the jobs in OC are in RE or connected to RE. As RE falls, so do these jobs and we are in the same unemployment boat as in the 90s. However, these days, I am not sure if this is really the case. That is, we might not have a huge unemployment problem and our local economy will be able to absorb all these RE workers.</p>

<p>The reason for my concern is New Century. I had a few friends there who got laid off and all of them and their team mates have found BETTER paying jobs in less than 2 weeks! I seriously thought it would take at least a few months but all of them found jobs in OC in industries not related to RE and are better paid. Granted, my friends are all in the IT world and not loan officers, mortgage sales, etc. Nonetheless, I figured that the market would be flooded with the same skilled workers looking for the same type of jobs and hence, it would take a while before most of these people have found jobs.</p>

<p>Do you think the OC economy is much stronger than we have thought? Will all those RE workers be able to find new jobs immediately?


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Your friends are the lucky ones. Really...what skill set does a mortgage broker really have other than lying? What skill set does a loan processor have other than overlooking the required documentation and fudging the numbers?





20% of the jobs are in RE and only 20% of the RE casualties will find jobs and only 20% of them will get jobs paying the same or better.





See 20% is a nice number isn't it?
 
What is in that 20% RE job number? Does that number only include "pure" RE jobs like underwriters and loan officers or does it include support like IT, Finance, etc? I had a couple friends in the same position but they were non-RE people working in a RE company so they were able to find jobs easily.
 
The IT and other professions who were ancillary to the primary business will likely do better because the job market can more easily absorb them. If you suddenly flood the market with mortgage brokers at a time when there is a dramatic downsizing of the entire industry, people will either be unemployed or underemployed for some time.
 
These unemployed mortgage brokers can go into the new field: Foreclosure sales, collection, REO, foreclosure counseling, ... I think I just solved the problem.
 
<em>"These unemployed mortgage brokers can go into the new field: Foreclosure sales, collection, REO, foreclosure counseling, ... I think I just solved the problem."</em>





There would be an interesting irony if these people had to clean up the mess they made.
 
IR, I was thinking about the same thing. In fact, banks are resetting ARM to a low Fix. Do you think Banks are just simply nice! Or they made a deal with the government. I can say NO ONE can "really" financially afford a subprime loan with the "sharky" rates. Most subprime borrowers are clueless about loan rates.
 
<p>NIR and IR (sorry had to do it) - I just saw an job ad somewhere for a company that specializes in REOs that wanted loan officers to work for them. The pitch was $120k a year.</p>

<p>I warn you this will be probably long winded. If you take the mix of jobs by industry construction, finance, RE and architecture related jobs account for 14.3% which is 42,000 jobs too many. Since 1990 this is a record high and in 1990 it was 11.8% and averages around 11%. But it is not about the commission based RE agents, loan officers or lender's account excutives that make that much difference. Many can linger on in their jobs without making any or little money because they don't cost anything and only get paid when they have deals completed. In times like this one deal can make a difference. So they can choose to move on or fight through it. If they find a job then great at least they are getting paid. But it is about the underwriters, funders, project managers, land aquistition, purchasing managers, title officers, escrow officers, assistants and customer service etc. people who end up getting laid off. Where are these people going to transition to? Since 2002 construction, RE, finance and architecture related jobs have been 40% of our job growth that would mean at least 10% of the job growth has come from other industries dependent on RE. What industry is growing that can take on these people in need of jobs? Please I beg someone to tell me. The foreclosure business can only absorb so much.</p>

<p>I just had dinner tonight with an appraiser, funding manager of a big bank and a loan processor with a lender of a major homebuilder. All of them have seen the changes. The funding manager had to pull a job offer to a funder because they stopped hiring. He also said that they were stuck with loans that couldn't be sold but sold them for $.60 on the dollar. This isn't some chop shop either we are talking big bank so they changed their guidelines. The appraiser said that business is SLOW. He was doing 2-3 a day in the peak and now is excited to do 5 this week. The loan processor goes to work everyday wondering if the managers meeting means more layoffs including him. The homebuilder has gone from a staff of 250+ to about 50. We are not talking about people who jumped on the RE bandwagon here but VPs who have been with the company for many years who dealt with significant projects. </p>

<p>So if this industry is contracting, 40% of OC's job growth in the last four years has been in this industry and the rest of our job growth has been weak elsewhere with only lower paying jobs where exactly are these people going to turn to? I really hate to be the doom in gloom guy because I love OC even with it's faults but we do need to come back to reality. By the way tech related jobs still have not reached the peak numbers it saw in it's bubble and many of them found jobs doing tech work with the RE industry.</p>
 
<p>graphrix,</p>

<p>You brought up a very good point; perhaps, you can keep us posted what is happening with these folks.</p>

<p>OC has been running out of land so I can imagine what is like to be in land development. If I am in this field I am almost certain I need to relocate.</p>

<p>Since commercial sector is booming, I hope these folks can make a transaction over too.</p>

<p>Real estate goes up and down, so may be this down phase is ending soon? I am seeing some bidding war going on.</p>
 
<em>"OC has been running out of land so I can imagine what is like to be in land development. If I am in this field I am almost certain I need to relocate."</em>





This is one area of the business that is healthy. Entitlement takes a long time, so the developers are active right now. Many are buying because there are plenty of distressed properties to be had.





<em>"Real estate goes up and down, so may be this down phase is ending soon? I am seeing some bidding war going on."</em>





No way. This is the beginning of a very long market contraction. Let's talk about the down phase ending after the mortgage reset time bombs have all detonated. Perhaps 2012, perhaps later...
 
even aside from just the RE-related jobs... all those people who were making great money during the peak are going to stop spending so lavishly.





if you go to a mall on a weekday there seems to be way too many people there. in all other places i've lived in, these places are dead during the day. but not in OC! granted, there's always going to be retirees, trust fund babies, and gangs of newport nancies pushing strollers at fashion island every day but in the past few yrs there were just way too many working age people just wandering around.





unemployment is a snowball effect. lets say ameriquest shuts its doors so you people who were directly involved in residential RE affected. but then you have the landlord of the bldg and all its staff affected. the shopping ctr where that bldg is sees a quarter of the people that used to work in that center suddenly disappear and their businesses are affected. and it keeps going from there...
 
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