November Jobs Report: For Real Estate, It's Not So Uplifting

While the government's monthly jobs report for November, which was released Friday, showed better-than-expected growth in the job market, it wasn't necessarily glowing for real estate.

According to the U.S. Labor Department's report, the economy added 146,000 new jobs in November, and the unemployment rate fell to 7.7 percent from October's 7.9 percent.

But Jed Kolko, chief economist at online listing site Trulia, noted that the uplifting jobs report also shows a downside for construction jobs. While the "employment picture for people ages 25 to 34 -- the prime age for housing demand -- continues to improve ... national construction employment has dropped 12.7 percent," Kolko told AOL Real Estate.

Specifically, Kolko said, here's what should concern the housing market in the jobs report:

• Construction employment is falling behind. Over the past three months, construction jobs decreased by 0.4 percent (annualized rate), and residential-building construction employment contracted at a 7 percent annualized rate, even though employment overall expanded by 1.3 percent. Since the recession officially ended in June 2009, residential-building employment has dropped 12.7 percent.

• The good news: Among 25-to-34-year-olds, the prime age group for housing demand, 75.2 percent were employed in November, up from 75.1 percent in October and from 73.9 percent in November 2011. For this age group, the unemployment rate was 7.9 percent in November of this year, down from 9.2 percent one year ago -- an even bigger drop than for the economy overall. This is the lowest unemployment rate for this age group since December 2008.

• Job growth in "clobbered metros" was 0.9 percent (annualized rate) through October -- behind the national average of 1.4 percent for the same period. Clobbered metros are defined as the areas with the biggest price declines during the housing bust and the highest vacancy rates now. Job growth there is especially important for housing demand. Many Florida metros, including Jacksonville and Orlando, had strong quarterly growth, while Detroit and its suburbs lost jobs.

See also:
The New Housing Boom Could Be Coming Opinion: In Obama's Second Term, What Will Happen to the Housing Market? Vacant Homes Plague Neighbors as Lenders Drag Feet

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