punchenpie_IHB
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Today I read an article about MGM Mirage axing 400 mid-level managers. Scary.
March data..OUCH!
- Thread starter optimusprime_IHB
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Part of it is the way unemployment is counted. If you have given up looking for a job, you don't count. If you take a job at half of what your salary was, you're not "unemployed," but you certainly could be screwed.
Also, what '05 numbers are you looking at? There is a chart here that shows '05 numbers all over the map. The current numbers are both better and worse than '05 per that.
And here is something interesting from '04 which seems to indicate that the unemployment rate was higher then because the "recovery" was utilizing more temp workers rather than businesses hiring permanent employees.
could be several reasons for that. ..
1) the residential real estate mkt is comprised in large part by entrepreneurs. realtors, mortgage brokers, title agents, appraisers, etc are often self-employed. might have no business but technically still have a job.
2) if lost my job working at new century and got a job at el pollo loco, i am still employed.
3) BLS numbers often get restated even several quarters after the fact so its best not to put too much weight on gov figures for at least a quarter or two.
I think you and others overstate the contribution to employment of the real estate and mortgage industries. On a county-wide basis, the entire financial services sector is roughly 8-9% of the OC workforce on average. That figure includes all of banking, insurance, etc. The real estate portion averages 2-3% of the entire OC workforce and obviously a bunch of that is in commerical, rental, etc. The OC workforce is dominated much more by the manufacturing, professionsal services, retail, government, leisure, educaton, and health-related employment sectors. When all of those start suffering significantly, I'll agree we are screwed... If Disneyland, UCI, and Boeing are cutting positions, we are definitely toast. I actually think significant reductions in state/local government employee will have a much greater effect on the local economy when/if they occur.
On a state-wide basis, the entire real estate, rental, and leasing sector typically comprises around 1.5% of the workforce. Even if half those jobs went away, the total impact to the workforce would be less than 1%. Yes, there are many 1099 types in RE, but the likely number in the low hundreds of thousands across the entire state. Between agents and brokers, there are around 600K licensees in the state, probably 300K recently active and perhaps 100K of those pretty much out of the game now. All just educated guesses with the exception of the 600K number...
Our state and local economies are not driven by the earnings of real estate and mortgage professionals no matter how much press the sector gets.
The EDD web site. They provide stats by county and statewide.
After a quick glance, I think he's including construction, which I was not. Real estate, rentals, and leasing is a defined EDD employment sector that is part of the financial services category. Construction isn't rolled into the same employment category...
The stats I was looking at are here. They even have info in Excel, my fave...
Yes, the IE has fallen quite a bit faster than Irvine. I'd be willing to bet that even IE prices won't be down 32% over the next twelve months, especially since they have crashed harder and faster. 32% in twelve months would mean that Corona home prices would have declined almost 60% in 28 months time... I wish it would occur, but I think that is a relative impossibility.
My guess is twelve months from now we'll be at mid to late 2003 prices after another 15-20% decline...
They don't know. That is why I was looking at RE licensees who I assume are mostly ICs. Then again, lots of people that do professional services, cut hair, clean your teeth, etc. are 1099 types as well so their impact on the employment picture is also missing...
The EDD numbers are probably not useful for distinct counts but rather general ratios between employment sectors. There are 1099 types working in many different fields/sectors. It's faulty to assume RE and mortgage are the only segments with siginficant "hidden" employment. Personally, I know many more ICs that work outside of RE and mortgage.
Wouldn't an increase in contract employment signal that businesses are hurting? 9-month contracts don't require matching funds for unemployment insurance, or matching 401k contributions, or health insurance, etc. It's just a straight weekly salary with a percentage going to the agency, right? Doesn't that signal a recession in normal business spending?
EvaLSeraphim_IHB
New member
ipoplaya said:
Part of it is the way unemployment is counted. If you have given up looking for a job, you don't count. If you take a job at half of what your salary was, you're not "unemployed," but you certainly could be screwed.
Also, what '05 numbers are you looking at? There is a chart here that shows '05 numbers all over the map. The current numbers are both better and worse than '05 per that.
And here is something interesting from '04 which seems to indicate that the unemployment rate was higher then because the "recovery" was utilizing more temp workers rather than businesses hiring permanent employees.
acpme_IHB
New member
could be several reasons for that. ..
1) the residential real estate mkt is comprised in large part by entrepreneurs. realtors, mortgage brokers, title agents, appraisers, etc are often self-employed. might have no business but technically still have a job.
2) if lost my job working at new century and got a job at el pollo loco, i am still employed.
3) BLS numbers often get restated even several quarters after the fact so its best not to put too much weight on gov figures for at least a quarter or two.
lendingmaestro_IHB
New member
Your number 1 reason is probably the number on reason. 1099 self-employed people don' claim unemployment benefits. The people that are actually still employed are making less money.
ipoplaya_IHB
New member
acpme said:
I think you and others overstate the contribution to employment of the real estate and mortgage industries. On a county-wide basis, the entire financial services sector is roughly 8-9% of the OC workforce on average. That figure includes all of banking, insurance, etc. The real estate portion averages 2-3% of the entire OC workforce and obviously a bunch of that is in commerical, rental, etc. The OC workforce is dominated much more by the manufacturing, professionsal services, retail, government, leisure, educaton, and health-related employment sectors. When all of those start suffering significantly, I'll agree we are screwed... If Disneyland, UCI, and Boeing are cutting positions, we are definitely toast. I actually think significant reductions in state/local government employee will have a much greater effect on the local economy when/if they occur.
On a state-wide basis, the entire real estate, rental, and leasing sector typically comprises around 1.5% of the workforce. Even if half those jobs went away, the total impact to the workforce would be less than 1%. Yes, there are many 1099 types in RE, but the likely number in the low hundreds of thousands across the entire state. Between agents and brokers, there are around 600K licensees in the state, probably 300K recently active and perhaps 100K of those pretty much out of the game now. All just educated guesses with the exception of the 600K number...
Our state and local economies are not driven by the earnings of real estate and mortgage professionals no matter how much press the sector gets.
lendingmaestro_IHB
New member
Ipop,
Where are you getting these numbers from? I've heard from several different sources that the number of OC residents that are employed in Real Estate is closer to 30%. Loan officers, processors, managers, executives, realtors, appraisers, construction, land developers, title companies, insurance companies, notaries, landscaping, IT jobs for mortgage companies, etc... You can't throw a rock without hitting one of these people in the head.
I'll be back later if I can find some numbers....
Where are you getting these numbers from? I've heard from several different sources that the number of OC residents that are employed in Real Estate is closer to 30%. Loan officers, processors, managers, executives, realtors, appraisers, construction, land developers, title companies, insurance companies, notaries, landscaping, IT jobs for mortgage companies, etc... You can't throw a rock without hitting one of these people in the head.
I'll be back later if I can find some numbers....
lendingmaestro_IHB
New member
here's an article a year ago from OC register stating RE and Finance jobs equating to 16.7% of the workforce. That's double your estimate and does NOT include insurance jobs, etc.
Orange County workers in real estate or finance to 16.7 percent of all local jobs in this past quarter
Another article that states 1 in 8 jobs is directly tied to real estate
12.5% (1 in 8) jobs directly tied to real estate
Orange County workers in real estate or finance to 16.7 percent of all local jobs in this past quarter
Another article that states 1 in 8 jobs is directly tied to real estate
12.5% (1 in 8) jobs directly tied to real estate
ipoplaya_IHB
New member
lendingmaestro said:
The EDD web site. They provide stats by county and statewide.
Anonymous_IHB
New member
re: "You will not see 2002 prices within a year. To get to December 2002 price levels would require a 32% drop from average selling prices today. That is not going to happen in 12 months."
http://calculatedrisk.blogspot.com/2008/04/quote-of-day-regions-financial-on.html
"there are cases where people as early as 18 to 24 months ago had one value on that property, and as they started to sell it or refinance it, they realize that valuation was 40% below what it was 18 to 24 months ago, and they're walking away from those homes in those markets"
Here's a place in Corona (ie. like Riverside for the out of towners): From Feb 20, 2007 $1,000,000 sale to $579,000 asking price today
http://www.redfin.com/stingray/do/printable-listing?listing-id=1382120
Here's how IE vs. OC stack up in the PMI report
http://www.pmi-us.com/media/pdf/products_services/eret/pmi_eret08v2s.pdf
Riverside-San Bernadino-Ontario CA, Risk rank 1, 93.2% chance of decline
Santa Ana-Anaheim-Irvine, Risk rank 1, 80.6% chance of decline
Could be a 2002 price drop in a year, anything is possible...
http://calculatedrisk.blogspot.com/2008/04/quote-of-day-regions-financial-on.html
"there are cases where people as early as 18 to 24 months ago had one value on that property, and as they started to sell it or refinance it, they realize that valuation was 40% below what it was 18 to 24 months ago, and they're walking away from those homes in those markets"
Here's a place in Corona (ie. like Riverside for the out of towners): From Feb 20, 2007 $1,000,000 sale to $579,000 asking price today
http://www.redfin.com/stingray/do/printable-listing?listing-id=1382120
Here's how IE vs. OC stack up in the PMI report
http://www.pmi-us.com/media/pdf/products_services/eret/pmi_eret08v2s.pdf
Riverside-San Bernadino-Ontario CA, Risk rank 1, 93.2% chance of decline
Santa Ana-Anaheim-Irvine, Risk rank 1, 80.6% chance of decline
Could be a 2002 price drop in a year, anything is possible...
ipoplaya_IHB
New member
lendingmaestro said:
After a quick glance, I think he's including construction, which I was not. Real estate, rentals, and leasing is a defined EDD employment sector that is part of the financial services category. Construction isn't rolled into the same employment category...
The stats I was looking at are here. They even have info in Excel, my fave...
lendingmaestro_IHB
New member
How does the EDD know what type of job you do if you are not a W2 wage earning employee who pays taxes? So do they just do surveys of random employees who are paid as 1099 independent contractors?
ipoplaya_IHB
New member
Anonymous said:
Yes, the IE has fallen quite a bit faster than Irvine. I'd be willing to bet that even IE prices won't be down 32% over the next twelve months, especially since they have crashed harder and faster. 32% in twelve months would mean that Corona home prices would have declined almost 60% in 28 months time... I wish it would occur, but I think that is a relative impossibility.
My guess is twelve months from now we'll be at mid to late 2003 prices after another 15-20% decline...
ipoplaya_IHB
New member
lendingmaestro said:
They don't know. That is why I was looking at RE licensees who I assume are mostly ICs. Then again, lots of people that do professional services, cut hair, clean your teeth, etc. are 1099 types as well so their impact on the employment picture is also missing...
The EDD numbers are probably not useful for distinct counts but rather general ratios between employment sectors. There are 1099 types working in many different fields/sectors. It's faulty to assume RE and mortgage are the only segments with siginficant "hidden" employment. Personally, I know many more ICs that work outside of RE and mortgage.
Nude_IHB
New member
Ipop, you seem to be operating under the assumption that EDD numbers reflect current reality, but they are a lagging indicator. Most people don't head straight for the unemployment office, they start looking for a new job. They hold off on filing a claim until they have exhausted other options and realize that any cushion in their accounts is going to be gone in a few weeks. If you want a true idea of the employment situation you have to look at service sector employment and small business closures; people that depend on other people's discretionary income for their own income. Look at movie theaters, non-automotive mechanics, landscape maintenance, etc. Look at the services, shops, and goods that people cut back on, or do without entirely, when they are struggling to make ends meet.
When those people lose their jobs it's because their customers can no longer afford their services. When small businesses fail it's because they lost whatever little bit of business was making the difference. These people either move to another service job or move to pay-under-the-table type jobs. The signs are easy enough to spot: restaurants cutting staff to cut labor costs, longer wait times in lines or on hold, more riders at bus stops, more bulk buying of sale items in grocery stores, more frequent use of coupons at the cash register, lower parental turn-out at school events, etc. Orange County might have some advantages over places like the Inland Empire, but I was there during the last two major recessions and the 70's stagflation. It's always been populated by highly paid people who work elsewhere and highly paid people who work locally, nither of which have made it immune to recession. The only difference is going to be at which end of the recession they lose their home.
The signs are recognizable to anyone who has lived through a prolonged recession. Not to sound insulting, but it doesn't sound like you have.
When those people lose their jobs it's because their customers can no longer afford their services. When small businesses fail it's because they lost whatever little bit of business was making the difference. These people either move to another service job or move to pay-under-the-table type jobs. The signs are easy enough to spot: restaurants cutting staff to cut labor costs, longer wait times in lines or on hold, more riders at bus stops, more bulk buying of sale items in grocery stores, more frequent use of coupons at the cash register, lower parental turn-out at school events, etc. Orange County might have some advantages over places like the Inland Empire, but I was there during the last two major recessions and the 70's stagflation. It's always been populated by highly paid people who work elsewhere and highly paid people who work locally, nither of which have made it immune to recession. The only difference is going to be at which end of the recession they lose their home.
The signs are recognizable to anyone who has lived through a prolonged recession. Not to sound insulting, but it doesn't sound like you have.
ipoplaya_IHB
New member
I haven't had to live through a prolonged recession Nude, you are correct. My only one was the tech recession, and the duration was rather short. I only started my career in '95.
I am in the business of putting people to work though, granted they are higher-end IT types, but March was our strongest month of Q1, and Q1 '08 was stronger than Q4 '07. We have done two perm deals per month of late as compared to an average of maybe one per month for the 2nd half of 2007. Some of that can be attributed to new fiscal year budgets, but in my little slice of the employment world, conditions have not been deteriorating rapidly. They took a turn last year, after the summer, but haven't declined much since then.
Between Wachovia and BOFA I have 25+ contractors working and as a general rule, their contracts are getting extended, not cut. We do have far fewer people in the local market though, so it might be that we have just been lucky in SoCal...
Mostly I am being bullish on employment for fun, to stimulate some discourse, and because I can't bring myself to be bullish on housing any longer!
I am in the business of putting people to work though, granted they are higher-end IT types, but March was our strongest month of Q1, and Q1 '08 was stronger than Q4 '07. We have done two perm deals per month of late as compared to an average of maybe one per month for the 2nd half of 2007. Some of that can be attributed to new fiscal year budgets, but in my little slice of the employment world, conditions have not been deteriorating rapidly. They took a turn last year, after the summer, but haven't declined much since then.
Between Wachovia and BOFA I have 25+ contractors working and as a general rule, their contracts are getting extended, not cut. We do have far fewer people in the local market though, so it might be that we have just been lucky in SoCal...
Mostly I am being bullish on employment for fun, to stimulate some discourse, and because I can't bring myself to be bullish on housing any longer!
optimusprime_IHB
New member
Can't find a link for it but I do remember reading something regarding the So Cal job market....Since 2000, something around 50% of jobs created are Real Estate related (brokers, agents, mortgage peeps, construction etc)
With this type of drop off in Real Estate construction and sales..I can't see how So Cal will avoid at least a mild recession.
With this type of drop off in Real Estate construction and sales..I can't see how So Cal will avoid at least a mild recession.
Nude_IHB
New member
I'm glad to hear that high-end IT employment is still strong, as the spouse of MS Systems Center test engineer it is reassuring to know she has job security. Let me know when business drops off, she'll want to dust off her resume.ipoplaya said:
Wouldn't an increase in contract employment signal that businesses are hurting? 9-month contracts don't require matching funds for unemployment insurance, or matching 401k contributions, or health insurance, etc. It's just a straight weekly salary with a percentage going to the agency, right? Doesn't that signal a recession in normal business spending?
no_vaseline_IHB
New member
What the heck is a non automotive mechanic?
jbatzmaru_IHB
New member
mechanic for other machine such as airplane, generators.... etc.
when company hire temps and contract vs perm employee.... it means that they are not committed and i think they put that under a different account on the books because it can be consider something else rather then payroll. company need the people but they just don't want to pay for the benefits. it is cheaper for the company also. When i was working as a temp/contractor i was not very happy and i was always scare of getting cut since they usually cut the temps/contractor before they cut the perm employee.
sucks to be a temp
when company hire temps and contract vs perm employee.... it means that they are not committed and i think they put that under a different account on the books because it can be consider something else rather then payroll. company need the people but they just don't want to pay for the benefits. it is cheaper for the company also. When i was working as a temp/contractor i was not very happy and i was always scare of getting cut since they usually cut the temps/contractor before they cut the perm employee.
sucks to be a temp