Real estate agents are often asked where we think the housing market is headed by people we meet. By way of response I often reply with a question “How’s your company doing? Are you hiring?
Here in Silicon Valley we definitely see a direct correlation between the hiring patterns of local companies and the health of the real estate market. When job reqs disappear so do home buyers and when companies are fighting for new employees, we’re fighting to get offers accepted in a bidding war. There’s good reason to expect this correlation to continue; the Bay area has limited space and there’s not much room to expand beyond our current boundaries.
When we try to predict the future of our housing market we can look to job growth predictions as a point of reference. While not an exact science it’s probably the best indicator we have of future housing demand in our area. According to a recent independent study looking at Bay Area job growth through 2040, by far the largest percentage of job growth in the US is expected in areas that are all key components of the Bay Area economic base. That’s good news for our local economy as well as our real estate investments.
Obviously many things factor into the creation of a healthy housing market; interest rates, economy, affordability, desirability, election cycles; but if the job growth predictions are accurate it looks like we have sustained demand for housing in our mid to long term future. Excuse me while I go buy some investment property…. 🙂