REAL ESTATE NEWS...Hiring boom: O.C. (California) real estate bosses add the most workers in a decade

Construction crews labor on a high-density residential development in the Platinum Triangle area in 2015.

It’s not just Orange County home prices or office towers shooting toward the heavens these days. Local real estate bosses were in a hiring mood last year, adding the most workers to their payrolls in a decade.

I tossed new state employment data into my trusty spreadsheet and found that a broad collection of local real estate industries – from real estate sales and leasing to construction to building supply to lending to architecture to janitorial services – added a total of 13,058 jobs last year, a 5.9 percent jump, to 234,925 workers.

That’s the biggest yearly increase in the number of real estate workers since 2005. And do not underestimate the widespread implications of the real estate rebound.

Countywide, jobs increased in 2015 by 47,225 new workers – a 3.2 percent growth that pushed Orange County’s overall payroll to a record 1.54 million workers.

Orange County’s real estate industries played a big role, creating 28 percent of all jobs added locally last year, after being the source of 29 percent of 2014’s job growth and 32 percent of 2013’s hiring.

The outsized influence of Orange County real estate, representing roughly 1 in 7 of all local workers, isn’t new. Since 2010, my tabulation of real estate jobs is up 43,033 workers, a 22.4 percent increase. That growth easily outpaces countywide hiring – up 172,358 workers, a 12.6 percent increase – in the five years since the Great Recession ended.

Remember, a hot real estate market creates wealth not just for property owners. It fattens the wallets of workers in various land-related industries as well as boosts companies that service the people benefiting from real estate’s surge.

WHO’S HIRING?

The real estate job market’s rebound from the bursting bubble of last decade has not been universally strong.

Yes, every key real estate sector has significantly added jobs. But only design shops are employing more people now compared with the payrolls during the housing bubble and crash from 2006 to 2010. Take a look at local real estate’s hiring trends:

• Construction bosses added 8,375 jobs last year, or 10 percent, to 90,383 workers. Since 2010, all the dirt moving and pillars growing skyward added 22,342 workers, a 33 percent increase. But that hiring hasn’t fully erased the 38,533 construction jobs lost from 2006-10, a painful drop of 36 percent.

• New structures can’t get built without supplies, so local lumber yards and home-improvement stores are hiring: Up 358 jobs last year, or 3.6 percent, to 10,242 workers. Since 2010, building-supply businesses have added 1,017 workers, an 11 percent increase. This niche, too, is still in recovery mode after losing 3,217 jobs from 2006-10, a slide of 26 percent.

• Somebody has to design those structures, too. As a result, architectural and engineering work is hot. This category added 858 local jobs last year, or 3.5 percent, to a record 25,592 workers. Since 2010, local design shops added 5,392 workers, a 26.7 percent increase, reversing the 3,092 jobs lost in the downturn, a dip of 13 percent.

• Curiously, finding people to fill all the new structures – owners or renters – didn’t generate new jobs in 2015. Employment at real estate sales and leasing firms was flat last year at 37,275 workers. Since 2010, this niche has added 3,167 workers, but the 9.3 percent increase hasn’t caught up to the 5,033 jobs lost as the bubble burst, a cut of 28 percent.

• High-priced property means lots of borrowing. Local credit businesses – various lending activities that are primarily mortgages – added 2,275 jobs last year, or 6 percent, to 40,175 workers. Since 2010, lenders added 8,383 workers, a 26 percent increase. But this niche was clobbered by the recession, losing 20,158 jobs lost from 2006-10, a decline of 39 percent.

• And all this property needs to be maintained. So building-service companies added 1,192 jobs last year, or 4 percent, to 31,258 workers. Since 2010, this niche has added 2,733 workers. The 9.6 percent growth has all but equaled the 2,858 jobs lost during real estates’ collapse.

WHAT’S NEXT?

Of course, a sour real estate market can drag down the economy.

Just look at real estate and the local business climate before and during the recession. The about-face was quick.

The local real estate industry went from its previous hiring peak in 2005 to being a job loser within two years. When the recessionary damage was done, the local industry lost 72,892 workers from 2006-10, a drop of 28 percent.

Those cuts were ugly and felt widely as the layoffs equaled nearly half of all countywide jobs lost – 156,625 positions – during the economic slowdown from 2006-10.

Real estate doesn’t live in an economic vacuum and today it’s a tad reassuring that the rest of the local economy is doing pretty well.

Local bosses outside of these property-related niches added 34,167 jobs last year. That’s 2.7 percent annual growth, the best year since 2000. And Orange County, minus real estate, has added 129,325 workers since 2010 – erasing the 83,733 non-real estate jobs lost in the four years before and during the Great Recession.

So can the current real estate hiring spree continue?

If you’re the type who worries about Orange County’s heavy dependence on real estate riches, this may concern you: Last year, property-related industries had 15.2 percent of the jobs in Orange County. That’s the highest share since just before the recession in 2008. Plus, 2015’s share is above real estate’s 14.7 percent average slice of the local job market since 1990.

On the other hand, real estate’s local employment influence is still well below the recent peak of 17.3 percent in 2006, when ultra-aggressive lending was over-inflating the local housing market in many ways, including too much hiring in real estate industries. In 2016, though, there are few signs of easy-money lending or other heavy speculation on real estate.

Jobwise, real estate bosses started the year in a hiring mood. Their collective Orange County job total – as measured by a 12-month average – was growing at a 6 percent annualized rate in January. That’s the fastest hiring pace since March 2014.

Yes, real estate employment is fickle. But as of now, it looks good for real estate workers here.