SoCal real estate job market tumbles amid high interest rates

"Employers across real estate services, lending, construction, building supplies and building services tracked 714,900 workers in Los Angeles, Orange, Riverside and San Bernardino Counties last month, according to the Orange County Register's analysis of California Employment Development Department data. That's 24,100 fewer than the same month a year prior. The difference marked a 3 percent drop in headcount. Self-employed workers weren't counted. The number of real estate services workers in the region fell 2,900 to 114,500 last month, a 2 percent drop from last year, the analysis found."

"The tumble started a few years ago, when a hot seller's market and national housing shortage, coupled with monetary policies favoring real estate, brought the industries to an apex. Real estate-related industries reached a post-Great Recession high of 761,700 local jobs in July 2022, the analysis found. Soon after, the market started to shift, with high-interest rates, inflation and the Federal Reserve backing off its pandemic-era easy-money policy and large purchases of mortgage-backed securities."

"At the same time, demand for local real estate and construction-related jobs, which make up about 9 percent of Southern California's nearly 8 million workers, fell as higher financing costs have become obstacles for construction, mortgages and the purchase of building materials. The construction sector, at 359,800 workers, lost 16,400 jobs, or 4 percent, compared to last August. The building supplies sector lost 1,100 workers in a year, or a 2 percent drop to 49,600 workers."

Southern California tracked 714,900 workers in real estate and construction-related fields, down 24,100 jobs (3%) from a year earlier. Real estate services fell 2,900 to 114,500 workers, and lending declined by 1,900 to 83,500 employees. The construction sector recorded 359,800 workers, losing 16,400 jobs (4%); building supplies fell to 49,600, down 1,100 jobs. Since a July 2022 peak of 761,700 local jobs, real estate-related employment has declined by 46,800 (6%). Rising interest rates, inflation and reduced financing have constrained construction, mortgages and material purchases, reducing demand for related labor.

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