EMPLOYMENT IN RIVERSIDE COUNTY DRIVES HOUSING DEMAND

Riverside County by any measure has suffered in the current housing down turn. Why? The major reason is that the basic factors that have always driven housing demand were broken between 2004 and 2007 as loans were made without reference to income, down payment and credit. Housing demand has always been driven by job growth. New jobs bring people to the region, New jobs allow young families to form and rent or buy a home. New jobs allow our children to move out of the family home and into an apartment.

Riverside has been particularly hard hit by job losses. Between 2006, the peak of employment growth, and 2010 a total of 176,500 jobs were lost from the economy of Riverside and San Bernardino Counties (Labor statistics are only available at the two county level). While an average of 47,000 jobs were added to the two County economy between 2000 and 2006, an annual average 44,000 jobs were lost between 2006 and 2010. I rank ordered the job categories with the larges job losses – the industries most hard hit were  Construction, Manufacturing and Trade. Job losses were experience in all job categories except health care.

A simple way to understand home jobs relate to housing demand is to look at how many jobs are available in an area as compared to the number of households (occupied housing units). Riverside County had a ratio of 0.95 jobs per household in 2000 and moved up to a healthy 1.04 jobs per household in 2006. In 2010 that ratio has dropped drastically to 0.84 jobs per household. No wonder the economy has been so hard hit and there are so many homeowners finding it hard to keep up their mortgage payments. There are far fewer workers per household to support costs.

Riverside is basically a commuter housing market, many households continue to drive to the employment rich Coastal Counties of Los Angeles, Orange County and San Diego. Orange County has the healthiest job to household ratio, Riverside/San Bernardino. Jobs which generate housing demand is clearly a major factor in the fact our Coastal Counties are showing a modest revival in housing prices and sales. We all know we need jobs. here is the link between jobs and housing demand.

Temecula’ Neighborhood Expert provides you with facts that explain the market. Information is drawn from multiple sources and summarized for your convenience. I am a housing market economist as well as a Realtor and have advised the  top management of major homebuilders and land developers through four previous recessions. I will continue to watch and report on market conditions – no strings attached. My goal is to win your trust and prove my expertise. Giving you a valid reason to choose me as your Realtor.