Jobs to be Lost as a Result of Housing Decrease

In a declining housing market, as many as 800,000 jobs may be lost. This number is based on a new economic report released yesterday by UCLA. The sustained slow down will affect the entire country, costing around 500,000 construction jobs and 300,000 more in the financial sector to be vanquished.

“We expect housing to start slowing the economy this quarter or the next,” said Edward Leamer, who directed the study. “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.”

Is a recession on the way?

The forecast said eight of the past 10 economic recessions were started by housing market slowdowns. Though the coming cool-down will cause a drag on the nation’s economy, it will fall short of triggering a recession. This is partly due to the continued success in certain regions. This would include the Florida home loan area, as the following numbers support.

Last month, the Florida Association of Realtors said Brevard County’s existing median home prices rose 6% over October. For the year, prices were up 35%. Many property owners, economists and Realtors have paid careful attention to real estate prices the past several months in order to gauge the state of the economy.

In Florida, and in Brevard specifically, new home construction and existing home sales have been an important sector of economic growth.

“There is every evidence that things will slow down,” said David Ling, co-director of the Center for Real Estate Studies at the University of Florida. “The question is ‘How much?’ ”

Franck Kaiser, chief executive officer of the Home Builders & Contractors Association of Brevard, said the local home-construction industry employs about 30,000 people directly. On top of that are wholesale suppliers — such as electrical companies and lumberyards.

Moreover, the home-construction industry supports employees at places like convenience stores, where many of the construction workers eat all their meals.

“It’s been the backbone of the economy for the last four years,” Kaiser said. “If it slows down, everyone is going to feel it.”

The report cited several signs the decline could be under way:

• New construction of housing in October was down 5.6% from the previous month, with new construction of single-family housing accounting for a 3.7% 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.”

Florida appears to be one of the healthier regions right now. While the constant news of a decline in the market is never encouraging, fortunes in The Sunshine State remain brigher than most other.