Jobs gains and effects on housing

While it’s true that the state is not adding jobs as quickly as it did during the building/housing boom years, job growth continues. The California Employment Development Department reported last week that 21,000 payroll jobs were added during the month of August. It was an unexpected gain from the job loss that occurred in July.

The construction, real estate and finance sectors are not adding any new jobs but gains are reported in technology, government, medical and service sectors.

Continued job growth is important to grow ourselves out of the current housing recession. During the last housing recession that began in 1992 and lasted until 1996, a million jobs were lost in California. Most of the jobs lost were high paying manufacturing and engineering jobs in the defense industry that began in 1991.

The end of the Cold War, presented an opportunity for a previous administration to cut defense spending thus reducing the number of troops, military installations and defense research. California, which had been the recipient of much defense industry growth, plunged into a jobs recession. The loss of jobs and high unemployment, created a housing bust with a higher rate of foreclosures and short sales than we have today.
This housing recession did not result from the lack of jobs or poor economic performance. California and most of the national economy has been doing quite well. It resulted from a lack of confidence. Buyers decided that housing prices had exceeded their affordability and stopped buying. As consumer confidence returns so will the housing market.