For years now, California – along with the rest of the nation – has faced difficulties with unemployment, a problem which has affected every sector of the economy. It’s pretty simple, without money people can’t buy the things they desire, and unfortunately for those of us the RE industry, this means fewer people are able to buy homes. Today, things appear to be changing though, as a recent study has shown that new construction projects are leading the way in job creation here in CA – a promising sign that investing in a home has become more desirable and that affordability will soon become less of an issue for some.
In a recent report conducted by Chapman University, researchers found that California job growth will speed up in 2015, driven by a surge in the construction industry.
According to the study, construction job creation boomed 7.8% statewide in 2013 – the same year that California added 447,000 total payroll jobs, which is a 3% increase. While not as significant of an increase, it’s believed that a 2.6% bump can be expected this year, followed by a 2.7% uptick in 2015.
Over the two-year period, 813,000 jobs are likely to be added, researchers predict.
Researchers said hiring is the broadest it has been in six years, with nearly every major sector showing positive job growth. But unemployment levels still vary significantly from region to region.
Fresno last year bore a 12.1% jobless rate, followed by the Inland Empire with an 8.3% rate and Los Angeles with a 7.6% rate. In Orange County, 5% of those wanting work don’t have it; in San Francisco, it’s 4.3%. Statewide, the unemployment rate was 7.8% last year.
Higher job growth is a promising sign, but it may not be enough to boost home price appreciation rates, which are weighed down by projections of a larger inventory of homes for sale and lower housing affordability. This certainly isn’t benefited by a lack in income growth and higher mortgage rates.
Nonetheless, construction spending growth has ramped up the last two years and is it is believed that spending will expand another 25.5% this year overall.
Do you think these new jobs will be enough to get the market back on track? What are your thoughts?
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