Jobs Report Shows Reliance On RE
The Bureau of Labor Statistics has the April report out. The non-farm payrolls for the month had a net gain of 274,000 jobs. "construction employment rose by 47,000 in April, with specialty trade contractors accounting for the bulk of the growth (40,000). Since its most recent low in March 2003, construction industry employment has grown by 551,000."
The NM News tells us that the number of mortgage employees hit a new high. "A record half a million workers are now employed in the mortgage banking and brokerage sectors, according to preliminary government figures released May 6."
This post includes these gains in the realtor sales force. "The National Association of Realtors says its membership has swelled to 1.1 million now from 766,560 in 2000, a rise of 46 percent. In Manhattan the number of brokers and sales agents has jumped 42 percent, to 26,220, in the same period."
The US has 150,000 young people reach employment age each month.
34 Comments:
How many retire each month? What's the net gain?
How many retire each month? What's the net gain?
Why do you people keep ragging on real estate workers?
Face facts. Real estate always goes up, and there is a ton of money to be made in the industry. You'd have to be a fool to keep working a 9-5 job for a salary when even the worst RE agents can pull down 200k a year for just walking through houses with clients.
I really dont see what this blog is supposed to accomplish. Are you all just jealous renters who are mad that they've missed the boat and been priced out of the market for the rest of their lives?
Here's a hint- try being positive for a change instead of trying to drag everyone down.
Wow, 2 million Merkins™ now work in mortgage finance and real estate sales. Now that's what I call productive employment.
When the RE market turns, perhaps we can outsource half a million of these Realtors™ and Mortgage Weasels™ to India or China. It's only fair. They give us so much and we give them so little.
I read yesterday that 50% of RE agents in California made ZERO sales in 2004. So it looks like lots of folks have paid their $199 (or whatever) to get a license in hopes of great riches but it ain't panning out too good.
More offshoring in hi RE price zones. Why hire attorneys, programmers, etc in high price areas when you can go to India.
http://www.businessweek.com/ap/financialnews/D89TMEBG0.htm?campaign_id=apn_tech_down
I'll go for it with why I am interested in real estate workers. The entire industry doesn't add value.
The compensation is wildly out of line with the amount of work (currently).
I just sold my house FSBO for a profit and did not pay commission. It wasn't hard work and I kept the $18,000.
Ben,
Let's also not forget that the exactly 257,000 of those 274K jobs were imputed by the BLS (BS) birth/death model. Although some analysts have tried to defend it, many have taken it apart as at best a guess, at worst pure fiction.
http://www.bls.gov/web/cesbd.htm
http://www.bls.gov/web/cesbd.htm
The 150,000 is the net number.
Real Estate workers are great as long as they are not collecting unemployment and welfare benefits.
Rentboy,
Good info, thanks.
Anon,
Real estate ALWAYS goes up, huh? Back up your arguments with historical evidence that justifies that point of view, please. Even hardcore RE bulls would hesistate to make that claim. I don't think it exists, but that's just me.
Otherwise, I assume you are just here to troll.
Sorry, but ... jobs report, real estate, birth/death model, a little humor ... I have to plug my blog:
http://www.themessthatgreenspanmade.blogspot.com/
I know Ben will understand.
Hi Tim!
Rentboy,
Hilarious, isn't it? I wonder why they admit to that "adjustment" on the web at all. Maybe they think the best place to hide a scam is in plain sight - especially since the mainstream media never says boo about it.
Last month they had to add 179K jobs to get to the "disappointing" number of 110K. Imagine if they'd openly admitted the original number of -69K. But I guess the jobs numbers and the Dow are like house prices now - they can only go up, by edict of the State.
Over on f#ckedcompany we have a mantra that I recite to myself when I need a laugh:
"It's a new paradigm, and anyone who doesn't buy, now, will be priced out forever. Anyone who does buy will be rewarded with a lifetime of riches, as their property will continue its annual 25% increases.
Renters, and those born in future generations, will be unable to afford a $10 million starter home in 5 years. They will live in tent cities, and Hondas.
This asset bubble is unlike any before it in history, because it will never slow down, or pop. The gains are permanent."
What's always funny is seeing who recognizes that as satire and who takes it seriously :)
I am actually in the process of reviewing my law books for possible claims to bring against people like Anonymous 2:14 when the market slaughters the last fools who jump in. There's a fine line between harmless sales "puffery" and opinion and outright misrepresentation of fact, and I think a lot of real estate brokers, sellers, and lenders are crossing that line every day to urge people to get into unsuitable houses they can't afford.
The fun thing about a litigation practice is that you make money regardless of which way the market goes: When things are going well, greedy people argue about who gets the windfall profits; when things go down, desperate people are anxious to blame someone else and recoup some of their losses.
"Real estate never goes down" -- pfeh. LA 1889, Florida 1926, countrywide 1930s, ditto 1982, SoCal 1990 -- stop me when I've made my point.
Hey guys new to the site one thing I haven't seen mention is the fact that loan officers are getting people to agree not to escrow their property taxes or homowners insurance into the monthly payment (this is prevelent in subprime loans)this helps them qualify by showing a lower monthly payment and helps their debt to income ratio. These people will have to pay their taxes and insurance when due and I'm sure low income/bad credit people can be trusted to do just that.
They can just "tap their equity" when the bill comes due.
The point is the lender KNOWS they due not qualify with a legitimate PITI and is doing a psuedo qualify with dropping the T and the I add on an I/O loan and you get to drop the other I. F---ing unbelievable!!!
3:18 Anon
OMG!! Lenders pay those costs from escrow for a very good reason: If there is a default on property taxes they can lose their claim, and if the insurance lapses they can lose their collateral to hazard. Anyone know if that type of action is criminal?
3:18 Anon
OMG!! Lenders pay those costs from escrow for a very good reason: If there is a default on property taxes they can lose their claim, and if the insurance lapses they can lose their collateral to hazard. Anyone know if that type of action is criminal?
Hey 2:14 PM Anonymous...
You must be very young. In So Cal "the worst agents" do not make anything close to 200K a year! First of all...the inventory is tiny = less homes to sell. 2nd most are not getting a full 6% listing fee right now due to the hot market. 3rd, the "the worst agents" split their commissions with their office (i.e. First Team etc). So to pull $200K (clear) they would have to be selling over 16 million dollars worth of real estate in a given year. Even at 600K per house that means they need to sell (or buy) 26 houses per year? If you’re moving 26 houses a year you’re doing better than "the worst agent". A "Fool" is the person who thinks this will continue. Who you gonna keep selling entry-level homes to when they get to $600K? The family with 60K per year of income...?
Please...
Pete in OC
C'mon guys, Anon 2:14 is just pulling your leg - nobody can be that dumb - he should've toned it down just a bit, and it would have been a lot more believable.
[In So Cal "the worst agents" do not make anything close to 200K a year! First of all...the inventory is tiny = less homes to sell.]
The thing is a lot of them have a huge conflict of interest--they are flipping homes on the side. I've spoken with several agents praising recent returns. They've got a unconscious pump-and-dump going on.
[Who you gonna keep selling entry-level homes to when they get to $600K? The family with 60K per year of income...?]
Exactly. They are. They have been. You can qualify for that right now.
The sleaziest thing about Realtors is the monopoly on the MLS. Without that they have nothing because consumers would pay half the commissions that are charged today.
4:27 Anon,
MLS or not, I've heard of agents taking far less than 3% just to make a deal happen. I don't think realtors are corrupt in general. They find themselves at the center of one of the biggest financial storms ever, many are newbies. Like the Corcoran broker said yesterday, she's too busy making money to train the juniors! And that was in the Hamptons.
Thanks for the comment.
Anon 4:18
[Who you gonna keep selling entry-level homes to when they get to $600K? The family with 60K per year of income...?]
Exactly. They are. They have been. You can qualify for that right now.
That's criminal!
Pete from OC
Deb
One word: WOW.
I would be drinking every day!
Pete in OC
As a Realtor myself, I can only assume that Anon 2:14 is a newbie who might be on a little roll and is letting his ego get the best of him. Any Realtor that has been in the business for 5+ years knows that values can and in fact do go down.
With all the newly licensed Realtors out there it is actually becoming harder to make money because it seems that everyone you talk to has a relative or friend who is a Realtor and they feel obligated to use them. So while 200k is possible it is not as easy as he stated.
I remember in the So Cal downturn of the 1990's (where values went way down) many Realtors had to file bankruptcy and lost their homes in foreclosure, and I suspect we will see this happen again in the not to distant future.
Just for the record there are some ethical and honest Realtors out there, so try not to stereotype us all. Also there are some of us that agree 100% that we are headed for a major correction in the very near future.
Deb,
I appreciate your comments on the board from the real estate side.
I think the services of licensed real estate agents are invaluable. They provide a well-regulated system for buying and selling homes. The internet is great for finding homes and I use it to my advantage in sync with a licensed agent. I appreciated that when we were showing our house the lockbox recorded which agents came through our house and when. The 6% commission is perhaps too high, but real estate agents take a big risk as they are self-employed and business isn't always steady.
As for your brother-in-law with the 600K I/O mortgage, ouch. Do you know the term? We just turned down an I/O 2-year ARM flat. It's just too risky. It's laughable when the loan officer says we can just refinance before it expires. Uh, how? Unless our income magically goes up in 2 years and interest rates go down (both unlikely).
He's got to work 10.5 years just to pay the principal on the property, and he's not even paying on that. It sounds like serfdom to me.
OC Pete,
You got it. Everybody and their brother and sister and uncle and second-cousin and unborn child are getting their real estate license right now. Low inventory and an oversupply of agents... I'm surprised anyone would want to go in to that...
But hey, a friend of mine who lives in the Bay Area has been out of college for two years now and trying to get a graphic arts job. Well, that hasn't panned out, so now she's studying for her real estate license.
She wasn't too happy with me when I torpedoed her dreams of real estate riches with my impending housing market crash diatribe.
Oh yeah...I am way down with an ethical realtor! I think the good ones are worth every penny they earn!
Pete in OC
Hey 3:42 Don, I don't know if it is criminal but I'm a loan officer and I have the smoking gun. They train us to not include the property tax and insurance in our GFE for the explicit purpose of making the "numbers work"
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