Want to predict the next real estate correction? When more than a quarter of all commercial real estate job openings are in property and asset management and acquisitions and development decline to less than 10 percent of all real estate jobs, it is a sign that the foot is coming off the gas pedal.
The third quarter saw overall commercial real estate jobs follow the U.S. job market and decline slightly, yet property and asset management jobs were up significantly, says the SelectLeaders Job Barometer. “Real estate asset prices have surpassed their prior 2007 highs, and employers are pulling back on growth-oriented hiring and instead building out their property and asset management capacity,” said Dr. David Funk, SelectLeaders chief economist, noting, “our Employment Cycle model is not yet predicting a correction, and cautious optimism could continue to rule the day but clearly there is a move to property management and corporate real estate hiring.”
U.S. Jobs and Commercial Real Estate Job Opportunities
The slight decline in real estate hiring was not as pronounced as that felt in the overall job market, and certain areas of the country are hiring hotbeds. Weather events in Texas and Florida hurt employment, yet resulted in real estate hiring spikes in that region and unexpected consequences elsewhere. “Manufactured housing plants as far north as Ohio and Indiana, for instance, have so many homes heading to Texas and Florida that their new order delivery dates are now as much as three months out,” said Funk, adding that an already strained construction labor market is now a red-hot sellers’ market.
The Job Barometer has tracked the commercial real estate job market for over a decade and developed the SelectLeaders Real Estate Employment Cycle as a predictor of where we are in the cycle based on hiring activity. When corporate real estate, real estate accounting, and property management opportunities begin to peak as a percentage of overall jobs it defines the cautious optimism stage. Employers and candidates share an attitude of hunkering down and managing their existing jobs and existing portfolio to maximize value. The stability in the economy and market is in drastic contrast to the real and potential disasters witnessed in Q3. Everyone who can is staying still.
This is part one of a two-part series on the SelectLeaders Job Barometer. Part two covers job opportunities. The SelectLeaders Job Barometer, published since 2006, is the foremost survey of employment opportunities, trends, and hiring practices in the commercial real estate industry.
Susan M. Phillips is the CEO of SelectLeaders, LLC, which powers the career centers for 12 premier real estate industry associations (whose members control or direct 90 percent of commercial real estate) and offers unequalled access to the real estate community.