Irvine Housing Blog

Home Sales Data thru 5-8-2007

There is a raging bull market in 92603! 92620, not so much.

Dumb, Dumber and Dumberer

It is said that speculative manias like the one gripping our housing market are a form of mass insanity. I have speculated it is a manifestation of Southern California’s Cultural Pathology. Whatever the truth, the results of herd mentality can be seen in our local housing market.

Asking Price: $639,800

Purchase Price: $183,500

Purchase Date: 2/2/1995

Address: 29 Marsala, Irvine, CA 92606

Beds: 3
Baths: 2
Sq. Ft.: 1,070
Lot Sq. Ft.: 2,975
Year Built: 1995
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Westpark
$/Sq. Ft.: $598
MLS#: S483960
Status: Active on market
On Redfin: 36 days

From Redfin, "Desirable End of Cul-De-Sac Private Location. Single Level. Highly Upg raded with Hardwood & Designer Ceramic Tile Flooring, Upgraded Wall-to-Wall Carpeting, Tile Kitchen Counters, Microwave, Dishwasher & Oven Included, Plantation Shutters, Custom Drapes, Window Blinds, Mirrored Wardrobes, Rollup Garage Door, Vaulted Ceilings, Recessed Lighting, New Custom Paint, Built-in Entertainment Center and Large Private Backyard"

Two bedrooms, 1000 SF and they want $598 SF? WTF! They didn't even update the old white tile with granite tops.

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(No Pictures Available, but it is identical to the other two listings)

Asking Price: $599,900

Purchase Price: $595,000

Purchase Date: 12/16/2005

Address: 15 Marsala, Irvine, CA 92606

Beds: 2
Baths: 2
Sq. Ft.: 1,000
Year Built: 1995
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Westpark
$/Sq. Ft.: $600
MLS#: S489460
Status: Active on market
On Redfin: 1 day

From Redfin, "Single level detached home with 2 private yards. Cathedral ceilings, p lantation shutters, designer carpeting, travertine flooring in the kitchen. Living room with fireplace. Mirrored wall in living room. Mirrored wardrobe doors and built-in shelves in closets."

IMO, this is the buyer / flipper / seller who started this mess, but more on that later...

Asking Price: $619,900

Purchase Price: $227,000

Purchase Date: 5/25/1999

Address: 6 Marsala, Irvine, CA 92606

Beds: 2
Baths: 2
Sq. Ft.: 1,000
Year Built: 1995
Stories: 1
Type: Single Family Residence
County: Orange
Neighborhood: Westpark
$/Sq. Ft.: $620
MLS#: S483966
Status: Active on market
On Redfin: 36 days

From Redfin, "BEAUTIFUL TWO BEDROOMS AND TWO BATHROOMS SINGLE STORY DETACHED HOME IN WEST PARK 2, LOCATED IN A QUITE AND INTERIOR NEIGHBORHOOD. LAMINATE WOOD FLOORING IN LIVING ROOM, DINING ROOM, AND KITCHEN. PLANTATION SHUTTERS AND NEW CUSTOM PAINT, THROUGHOUT THE HOUSE. NICE BACKYARD AND SIDE YARD, VERY OPEN FLOOR PLAN. SHORT WALK TO SCHOOL, THREE ASSOC. POOLS AND SPA, TWO TENNIS COURTS AND PARKS. TWO CAR ATTACHED GARAGE."

ALL CAPS IS REALLY ANNOYING! This is another tiny, 2 bedroom unit where they didn't bother to update anything.

Let's look at these three properties and see what we can determine. First, the $600 SF pricing is ridiculous. Most of Westpark is priced in the $400s per SF, and even the overpriced smaller products are in the low $500s. There is no justification for thinking $600SF is a good price. For the same $600,000 asking price, one could buy 37 Alcoba, 1407 SF, 3/2. For $500,000, one could by 6 Marbela, a 1083, 2/2. Both of those Westpark properties give much more for much less, and they have been on the market for over 280 days. So why do the sellers on Marsala believe they can get $600 SF?

Perhaps this is an instance of setting one's own comps. The seller at 15 Marsala paid almost $600 SF at the end of 2005. I would imagine when the other two properties went on the market last month, they used 15 Marsala as a comparable, and they figured their properties must be worth $600 SF.

Are you starting to get a sense for how the "greater fool" theory operates? 15 Marsala was a fool when they paid $600 SF at the end of 2005, now they and two of their neighbors (dumb, dumber, and dumberer) all need to find a greater fool to buy them out.

For their collective greed and stupidity, for believing their little neighborhood is "different," and for setting their prices 20% to 30% above the market, all three sellers on Marsala get our WTF Award.

Thought of the Day—5/30/2007

A sense of entitlement, enabled by prodigious amounts of borrowing, can overcome fiscal responsibility and prudence.

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Springacre is the Place to Be

Asking Price: $429,000

Purchase Price: $495,000

Purchase Date: 6/04/2004

Address: 34 Springacre #5, Irvine, CA 92614

Beds: 2
Baths: 1.5
Sq. Ft.: 1,362
Lot Sq. Ft.: 1,348
Year Built: 1980
Stories: 2
Type: Condominium
County: Orange
Neighborhood: Woodbridge
$/Sq. Ft.: $315
MLS#: P557313
Status: Active on market
On Redfin: 119 days
Unsold in 90+ days

Sale Date 04/30/2004
$/Sq. Ft. $363.44

Sale Price $495,000
1st Loan $396,000
2nd Mtg. $74,250
Lender Cal Coast Mtg Corp

From Redfin, "Welcome home to this exquisite end unit, in the sought out community o f Woodbridge. Built in 1980 and completely upgraded in the past 2 yrs. Marvel @ the detail put N2 top of the line flooring, recessed lighting, cabinets in both baths & the kit, stainless steel appliances, jack & jill bedrooms with dual sinks, no stone left unturned, it is an absolute must 2C! Enjoy the ambiance of a cold winter night around a cozy fireplace or the privacy of tanning on your own private sun deck. Short Sale!"

I think this realtor has been sending too many text messages...

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The theory has been floated by some that these short sales are deliberately priced low to generate interest and create a bidding war. In the heyday of greater fool market psychology this might have worked. At 119 days on the market, the bidding war is off to a slow start. This is priced about $40,000 lower than more recent comps for smaller units. It is $80,000 below comparables of similar size. At this price point, that is nearly 20% off!

It has to be hard for sellers to maintain denial when a property can be priced 20% below comps and sit on the market for 119 days. I don't have the asking price history, so maybe this was a recent drop, but it still sits there unsold. It goes back to the point I was making in the post The Day the Market Died, the lower end of the market is dead -- there are almost no resales at any price. The builders get to cheat with financing incentives, etc., but resellers have to find qualified buyers with downpayments: none are available.

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Every time I saw this address, I kept hearing the theme song to Green Acres in my head. Click the link and enjoy.

The Supply Side - Orchard Hills

There has been plenty of discussion on the issue of the fundamentals of why housing prices in Orange County are indeed, not rational. One of the most common metrics cited by those with or without a basic economics background is the rent versus buy 'price' (monthly payment). These prices are the net output of a large number of variables, including (very importantly) what amount can be mortgaged, as IrvineRenter has explained in previous posts. I would like to take an opportunity to focus on the supply side of the equation, to help frame the discussions. Some of this is for statistical consideration, and some is simply to discuss the housing product and this blog community's view of the current and future marketplace offerings.

One of the commonly-recited phrases heard in defense of high housing prices, especially in Orange County, is "they aren't making any more land." There are a number of technical arguments to refute the idea that (even if true) this justifies high levels of appreciation, which is not the point of this post. While Irvine is extremely desirable, it is far from built out, and it appears to this blogger that there is significant rental and new home inventory available and coming available even as sales continue their sluggish pace.

One area of particular interest is Orchard Hills in Irvine. As has been discussed on the forums, this area has attracted plenty of interest for those hoping for something less remote than Portola Springs and more scenic than Woodbury or the Villages of Columbus. Any hopes for something reasonably affordable in a nice location have been dashed by the recent market survey postcard showing prices starting at $1.25 million and going up from there. It would appear that The Irvine Company is attempting to take the Turtle Rock experience and move things even further upmarket.

Fewer than 4,400 homes are planned - reduced from the 5,903 in the existing General Plan for the city of Irvine, and dramatically fewer than the 11,800 units in Irvine's original General Plan. This will allow for 3 units per acre - fewer homes per acre than Irvine's original hillside village, Turtle Rock.

While these lower densities sound desirable, this is obviously coming at a price.

The area is large, and I have a preview of construction that has begun at the southwest corner near Jamboree and the 261. Some pictures from Sunday walks show the state of progress.

The new retail center, scheduled to open this summer.

Closeup of the Orchard Hills brickwork style at the retail center. This same rustic-looking brick is seen on the grand entrance walls in the residential areas.

Culver and Settlers, from the hill, looking west.

Settler's multiple lanes of gated entrance off of Culver, with the Irvine/Costa Mesa skyline in the distance.

Trees ready for planting along Settlers, looking east

IAC apartments on Whispering Trail, looking west from near the retail center

View of the apartments looking east, near the 261 toll road, with the privacy wall in progess for the homes up the hill. There is approximately 30 feet of elevation change down to the street level of the apartments.

Is the market ready for Orchard Hills?

Frankly, I'm a bit skeptical that more premium apartments and premium homes are what this market is looking for right now, and I foresee a bit of a miscalculation (or at least mis-timing) on the part of The Irvine Company. But TIC is well known for savvy market research and planning, so it will be interesting to watch unfold.

Regarding the apartments, we know that certain specific apartments at Woodbury Lane have yet to see their first rental, despite being available for over 10 months. If one checks the inventory at the newly-opened Portola Place, unit after unit has multiple available "now," status which indicates plenty of supply. I don't yet know the exact number of units they are building at Orchard Hills, but to my eye the number appears large compared to nearby communities such as Estancia, Anacapa, and Somerset.

Regarding the homes, we keep hearing reports about how the upper end of Orange County's housing market is holding up well, perhaps because the folks with all the millions are not subprime borrowers. But the housing food chain cannot be deprived of its plankton forever without impacting the big tuna. Given the challenges the homebuilders are having at the Villages of Columbus and Portola Springs, the continuing trend of increasing inventory and decreasing sales in the resale market could make for a rocky ride ahead.

Irvine’s Deerfield

In the heart of Irvine there are a number of small neighborhoods that are less well known than Woodbridge or Turtle Rock or some of the other larger or newer communities. These neighborhoods are no less interesting or well planned than their more famous brethren. One of these hidden gems is the community of Deerfield.

Deerfield is north of Woodbridge bounded by Irvine Center Drive, Culver Drive, Yale Avenue and the rail line which bisects Irvine. Deerfield Avenue is the main collector street moving traffic throughout the community. There is an apartment complex at the corner of Irvine Center and Culver, and there is other high-density housing north of Deerfield Avenue near the railroad tracks. The remaining housing is a mixture of one and two story dwellings. Deerfield was one of the earlier communities developed. It's buildout was complete in 1976.

Life in Deerfield revolves around the large community park. This park together with an elementary and middle school comprise a large central greenspace. There are a series of pathways linking three satellite parks to the community park. This is a great master plan which allows children to walk or bike to school or the park without crossing busy streets.

Deerfield Community Park has great play areas. Notice the high, double-corkscrew slide -- great fun for the young at heart.

There is another tot lot for smaller children with safety swings.

Another Frisbee golf course, apparently a popular feature for parks in the 60's and 70's.

Frisbee golf is still played today...

The community park has a building staffed year round.

There are also volley ball courts and tennis courts.

The north end of the central greenspace is occupied by Venado Middle School and

Deerfield Elementary School.

The trails link the central park to satellite parks. As you can see, these are used by the locals.

Northern Park (pool not shown).

Eastern park with children at play.

Western park and pool.

There are apartments and high density condominiums in Deerfield. The density is lower than the adjacent Windwood community behind Culver Plaza, and it is higher than the adjacent community The Ranch.

There are attractive single-story homes.

Many show pride of ownership.

Landscaping you only find in mature communities.

There is also a mixture of two-story homes.

Plenty of pretty flowers...

The varied architecture and mature landscaping makes for an attractive street scene.

The sub-neighborhoods have landscaped entries, but there is no names to give further identity.

A Lamborghini is going to stand out no matter where you park it, but it seems out-of-character with the modest, working-class homes in Deerfield. So what do you think? HELOC? Visitor? Car rich and house poor? Recent lottery winner?

Deerfield is a nice neighborhood to live and raise children. The central park gets plenty of use, and it provides a unifying element where neighbors meet neighbors and children play together outside. It doesn't have the fame of Irvine's other neighborhoods, but it is no less desirable as a place to call home.

Irvine's Deerfield: a great place to live.

Fine Spanish Lace - UPDATE #2

Old Asking Price: $513,000 or $507,000

New Asking Price: $479,000

Purchase Price: $486,000

Purchase Date: 6/9/2006

Address: 39 Spanish Lace, Irvine, CA 92620

Beds: 1
Baths: 1.5
Sq. Ft.*: 1,135
Year Built: 2006
Stories: 1
Type: Condominium
View: Mountain
Neighborhood: Woodbury
$/Sq. Ft.*: $452
MLS: S477287
Status: Active on market
On Redfin: 56 days

Redfin, Zillow, FirstTeam

From the listing:

"Truly better than any Model Home, owner spared no expense was planning to stay forever! Upgraded everything, Carpets, Tile, Paint. Kitchen has Stainless Steel appliances and custom backsplash. Recessed lights throughout, Ceiling Fan in Master Bedroom, Living Room is Prewired for Fan. Additional Cabinets added in Laundry Room, Closet Organizers in Master Bedroom Walk-In Closet. Desirable Street Front Location, Great Mountain Views from Private Front Balcony"

Notice there are no granite tops in this truly-better-than-any-model condo. Maybe the 80's style white tile is the new black? Granite tops was so 2005. Who wouldn't want the high-end white tile? After all, this flipper / home debtor / owner was planning to stay forever! Yeah, right...

I must admit, I have a particular prejudice against 1 bedroom apartments / condos selling for more than their rental value. The only reason any rational person would buy this unit is to make positive rental cashflow, or to save versus the cost of renting. Nobody wants to live in these units for more than a couple of years. This isn't a house that you buy to live in for a long time. It's transitory housing, and it always will be.

First Team's website tells me my payment would be $2,564 a month (based on a $507,000 purchase price), the HOA is $150 a month, and the taxes are $464 a month, plus another $100 for insurance. The total cost of ownership is running $3,642 a month. Does anyone think they can get $4,000 a month rental on this place?

Let's be real for just a moment. Buying a unit like this isn't about being rational, it is about greed. There is no justification for the pricing of these units other than the buyer believes these units will rise in price forever. This is the "greater fool" theory on full display.

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The painting is No. 1 (Spanish Lace), 2006, Mixed Media, by Charles Dwyer

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**** UPDATE 1 ****

The deterioration at the bottom of the market continues. Assuming a 6% commission, this flipper / long-term homeowner stands to lose $26,340.

**** UPDATE 2 ****

Now the loss would be $35,740. Thank you Mk9 for the heads-up.

Trippin’ with Hendrix

Asking Price: $1,395,000

Purchase Price: $635,000

Purchase Date: 2/19/2004

Address: 3751 Hendrix St., Irvine, CA 92614

Beds: 5
Baths: 4
Sq. Ft.: 3,450
Lot Sq. Ft.: 8,216
Year Built: 1971
Stories: 2
Type: Single Family Residence
View: Park or Green Belt
County: Orange
Neighborhood: Westpark
$/Sq. Ft.: $404
MLS#: S430193
Status: Active on market
On Redfin: 437 days
Unsold in 90+ days

From Redfin "Elegent remodeled home with new landscape situated on a cul-de-sac in the Paseo West Park. Designed for intimate living. Approximately 3,450-sq-ft. The residence inclusive of 5 bedrooms, and 4 bath. Gourmet center island ktchen with top-of-the-line appliences opens to family room. This home features beutiful travertine flooring throughout the first floor, granite countertops, entertainer's delight custom built-in bar. Outside, entertain poolside on the patio area as well as built-in BBQ center."

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Lets call this seller "unmotivated." You would think the message would get through that the property is overpriced when it doesn't sell for over a year. There are comparable properties in this neighborhood asking less than $900,000:

3831 Cosley St., Irvine, CA 92614-6670 - $859,000 - Redfin

17551 Friends CT, Irvine, CA 92614-6625 - $889,000 - Redfin

3931 Claremont ST, Irvine, CA 92614-6662 - $864,900 - Redfin

It appears our seller has lost touch with reality. Perhaps they are channeling Jimmy Hendrix, or perhaps they dropped some acid and never came down. Either way, for asking 80% more than their house is worth even in Irvine's inflated market, these sellers win our "WTF Price Award!"

WTF-Were-You-Thinking Prices

When I am looking for flips to profile, I look at many properties. Most of what I find is priced near to what the current market will bear. In short, the seller and the realtor are at least trying to sell the home. However, sometimes I will come across properties where the pricing is so ridiculous that I laugh to myself at the stupid greed of my fellow man.

Shadenfreude, or joy in the misery of others, is why we feature failed flips, and it is part of the fun of this blog; however, as I have noticed myself laughing at the embarrassingly foolish asking prices of amazingly greedy sellers, I wanted to share that experience with the rest of you.

With the series the Knife Catcher Award, we are featuring flippers who put a property for sale within 6 months of purchase. The people foolish enough to knowingly attempt a flip in this market deserve a special honor. In this post, we are introducing a new honor: the "WTF Price Award." To be awarded this honor, a seller's asking price needs to be higher than a "wishing price." It needs to be so high that I laugh to myself when I see it (plus it helps if there are comps to prove it.) From now on when you see the "WTF" symbol in the post, you know this is a special property which has earned this unique award.

Asking Price: $905,000

Purchase Price: $159,500

Purchase Date: 3/1/1979

Address: 17 Rustling Wind, Irvine, CA 92612

Beds: 3
Baths: 2
Sq. Ft.: 1,860
Year Built: 1978

Type: Condominium
View: City Lights, Park or Green Belt, Trees/Woods
County: Orange
Neighborhood: Turtle Rock
$/Sq. Ft.: $487
MLS#: S488161
Status: Active on market
On Redfin: 8 days

From Redfin "One of a kind! Absolutely spectacular! Rebuilt from top to bottom. Overlooks Nature Preserve and city light view. Top of the line everything! You have never seen anything like it! Professional gourmet kitchen w/ hand selected cherrywood cabinets, stainless steel appliances, Crema Bordeaux granite counters, extended self-closing drawers, 900 lb. pantry, recessed lighting, crown molding, Pella & Anderson windows and doors. Designer baths. When only the best will do!"

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This is not a flip. Below is this units competition:

Price: $869,000

4 RUSTLING WIND
IRVINE, CA 92612-3210

Beds: 4
Baths: 2.5
Sq. Ft.: 2,855
Year Built: 1978
Stories: 2
Type: Condominium
View: City Lights, Hills, Park or Green Belt, Trees/Woods, Other
County: Orange
Neighborhood: Turtle Rock
$/Sq. Ft.: $304
MLS#: S471024
Status: Active on market
On Redfin: 125 days
Unsold in 90+ days

So here we have two condos in the same community. One is a 4 bedroom 2.5 bath home upgraded with granite tops etc., and it has been on the market, unsold, for 125 days at a price $45,000 lower.

WTF, are this seller and realtor thinking? If the bigger, better house is not selling at $304 / SF, how is this house going to sell for $487 / SF?

There are "wishing prices," and there are "WTF-were-you-thinking prices." This is one of the latter. I am tempted to go see this unit just to ask the seller, "Are you joking?"

The REal Jobs Situation

I think we can all agree whether you are a housing bull, bear or giraffe that jobs and wage growth are primary factors to a healthy housing market. This has become quite the hot topic amongst the bulls and bears with various facts and myths that have been slung around. One fact is that much of the job growth in the last several years has been in the RE industry. Lansner over at the OC Register has mentioned this several times and has noted that in the last four years RE accounted for 52% of the job growth. It is also a fact that other jobs have been created but at a very weak rate. Does this seem like a healthy job market when real estate sales are down 40% from the peak, mortgage companies are going BK or laying people off every quarter and homebuilders are slashing staff to bare bone levels just to function? Well let's take a look at what I have found and you can make your own judgment.

The Data
I used the data from the EDD which gets their data from the BLS. The best info I can find on the actual jobs numbers are from this spreadsheet from the EDD. I have my own spreadsheet that uses the same data. I added the employment numbers and rates that are missing from the EDD spreadsheet and I have done several various calculations. I know it is not as organized or as pretty as some of Irvinerenter's but the data is there. For RE related jobs I use construction, credit intermediation and related activities, real estate and architectural, engineering and related services. These categories compiled together are what I like to call the RE jobs and will known as such from here.

A Little History and Some Averages

Historically RE jobs have accounted for an average of 11.5% of the total non-farm jobs in OC since 1990 to 2006.

In 1990 the average was 11.5% and did not reach that high again until 2001. In between that time the average was 10.6%.

In 2006 the percentage of RE jobs accounted for 14.2% of the non-farm jobs for a new all time high.

The reason why this is an important way to look at RE jobs and why the percentage matters is the RE industry is a need based employment sector. So in other words when jobs other than RE are being created the RE jobs would increase in number but not as a percentage. RE jobs need other jobs to be created or they would not increase and they definitely should not increase as a percentage.

From 2000 to 2006 131,200 total non-farm jobs were created and 62,400 of those jobs were RE related accounting for 47.6% of the job growth.

It doesn't make much sense when only 68,800 non-RE related jobs were created that OC would need to have that much RE jobs growth. Considering that from 2000 to 2006 non-RE related jobs grew by an amazing 5.3% and RE related jobs increased by 29%.

This clearly paints a picture that OC has been very dependent upon RE job growth in the last six years. That dependence on sector that is a need based industry when the need was self fed poses a serious risk to the overall employment in OC.

The Aerospace Myth

The typical bull mantra about the 90s was that the aerospace industry killed the housing market. This is a serious error when the numbers are not there. Manufacturing jobs which include aerospace did have a significant decline but it wouldn't call for such a steep decline in the RE related jobs or a decline in the housing market.

Between 1990 and 1993 OC had lost a cumulative total of 57,000 non-farm jobs and in 1994 only had lost a cumulative total of 45,600 non-farm jobs.

Between 1990 and 1994 aerospace had lost a cumulative total of 7000 jobs accounting for only 15.4% of the non-farm job losses.

Between 1990 and 1994 manufacturing had lost a cumulative total of 37,300 jobs accounting for 82% of the non-farm job losses.

Between 1990 and 1994 RE had lost a cumulative total of 20,500 jobs accounting for 45% of the non-farm job losses.

As can be seen in those numbers RE and manufacturing accounted for more than the cumulative total non-farm job losses. That means that other sectors were creating jobs which would create a need for RE related jobs. This didn't start to happen. The reason had more to do with housing prices and buyer psychology.

The Wage Growth Myth

The bulls all say that wages are up and people are making more money than ever. This couldn't be further from the truth when you exclude RE related jobs. I actually believed that this mythical statement might have been true. I was disturbed that when you break it down the way that I have that it shows a loss. I had to use data from 2000 to 2005 because the annual data for 2006 is not available yet.

Between 2000 and 2005 payroll wages grew by slightly over $14 billion.

Between 2000 and 2005 payroll wages for RE grew by slightly over $6.6 billion accounting for 47% of the growth.

Between 2000 and 2005 payroll wages for non-RE related jobs grew by slightly over $7.4 billion accounting for 53% of the growth.

When you break down how many non-RE related jobs there were in 2000 compared to 2005 there were 48,600 more jobs. So what you have to do is take the annual payroll and divide it on a per job basis. After adjusting for California's inflation rate of 15.9% between 2000 and 2005 non-RE related payroll wages shrank by -$662 million in that time.

Using the same break down RE related payroll wages soared by nearly $2.1 billion. This adds for more evidence that the industry was self feeding itself and how much OC was dependent upon the industry for growth. With sales down nearly 40% since 2005 it will be interesting to see this stat in the next few years.

The Overwhelming Evidence

I may be a housing bear but these are the numbers and the numbers do not lie. It can be said that a liar can lie about the numbers but that is why I provided my own spreadsheet for anyone to check the numbers. The proof is OC has had very poor job growth when excluding RE related jobs. What is even worse is wage growth has actually been negative when excluding RE related jobs. So how or why have we had such a huge run up in the prices of homes? It makes absolutely no sense what so ever and anyone who tells you that wages have been growing is lying.

The other troubling statistic is with all the layoffs and overall slow down is where will these people find jobs? The response you will hear from the bulls is they will find a new job or return to the industry they came from before. Some of the more educated and talented in the RE industry will either stay in the business or find another industry. However the majority will have difficulty finding a career that pays as well. The RE industry is more than just sales agents and loan brokers but underwriters and escrow officers. Many of the other jobs have paid well and required very little training or education. The jobs currently being created are in professional and technical services, medical services and education. These categories require higher education and unless the person who is no longer in the RE industry had this education from before they will have to get it now. This will either take job seekers out of the market to get the education needed or they will have accept lower paying jobs or be unemployed.

Now do you see a problem or is it sunny today?