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The 3 Ways the Last Jobs Report

Will Affect California Real Estate in 2020

Article Courtesy of Sparkling Marketing

According to the UCLA 3 Ways a Slow Jobs Report Will Affect California Real Estate
Anderson Forecast, Employment is one of the biggest indicators of the state of the housing market. Home sales are
California’s economy directly tied to the health of the economy, and they rise and fall with economic activity.
The unemployment rate is one of the most closely monitored statistics, because a rising rate is
will continue to seen as a sign of a weakening economy and might call for a reduction in interest rates.
grow in the coming There are several ways slow employment growth affects real estate. Here are three of the most
years - but the pace significant factors:
will slow alongside
a sluggish economy 1 Reducing the Money Supply
on the national level. As the economy slows and employment drops, the supply of money becomes more restrictive.
The Bureau of Labor Without a paycheck, people can’t afford to buy or rent houses. Money will become harder to borrow,
Statistics states meaning fewer home buyers will enter the housing market. Inventories of homes will go up, and
homes will take longer to sell.
that the California
unemployment rate is 2 Low Demand for Commercial Real Estate
at 4.3% as of March A decrease in jobs also lowers the demand for other types of real estate. Without work to pro-
2019. vide jobs, a business has no need to purchase and occupy commercial real estate. This includes retail
spaces, office suites, warehouses, or land for development.
What will a slow
jobs report mean for 3 Increase in Foreclosures
When employment dips, there is also an increase in the number of homes entering foreclosure.
California Real Estate When homeowners lose their jobs, they may be out of work for several months. This can cause them
in 2020? Let’s take to fall behind on mortgage payments and enter foreclosure. According to recent statistics, in Febru-
a look at how jobs ary 2019 banks repossessed 11,392 properties in the USA.
impact real estate and
what the future will The Future of California’s Housing Market is Strong
bring. The good news is that although job growth in California is slow, it’s still growing. There is no
indication that the market will crash anytime soon. In fact, it’s currently more stable than it was in
the past.
California’s economy is expected to dip slightly in 2020 and then enjoy an upward push in 2021.
High employment and rising wages will fuel rising home prices. The Mortgage Banking Association
states that peaking millennial demand and mortgage interest rates will keep home sales growing
over the next five years.
Real estate will always be a good long term investment. Even though the housing market will
fluctuate, in the long run, a property will almost always appreciate.
To learn more about California real estate, contact our team.

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