Posts tagged with: real estate

Unemployment slows down the housing market

For years, I’ve covered the housing industry for newspapers such as the Washington Post and Chicago Tribune. I also edit a real estate trade magazine. It’ve seen, then, just how hard it is for most people to come up with a downpayment of 20 percent when they want to buy a home.

If you don’t know, mortgage lenders for years asked borrowers to scrape together a downpayment equal to 20 percent of a home’s purchase price. That can be a ton of money. If you buy a modest house for $220,000, a downpayment of 20 percent equals $44,000. I don’t know a lot of people who have that kind of cash sitting around.

During the housing boom, though, lenders relaxed their standards. They began requiring far more doable downpayments of 5 percent, 3 percent or, in some cases, zero percent. That made it easier for people to buy homes. Of course, it also helped push the housing industry into the chaos it’s suffering through now with record foreclosures and plummeting housing values.

So the lenders have changed. Most have done away with no-down programs. Many others have even left behind the 5-percent-down programs. Many borrowers are now going with FHA loans, which require downpayments of just 3-and-a-half percent.

What does all this have to do with careers and jobs? Plenty, as it turns out.

Each year, the National Association of Realtors releases a study gauging the thoughts of the public regarding homeownership and housing affordability. This year’s study said that getting enough money for a downpayment was a stumbling block for 82 percent of survey respondents. And why is it so hard to get a downpayment? Partially because of the economy.

According to the Realtors survey, two-thirds of respondents cited layoffs and unemployment as serious problems today. A total of eight out of every 10 survey participants pointed to these problems as barriers to purchasing a home.

The housing market and the nation’s economy are linked together. And when they’re both performing as miserably as they are today, it makes life exceedingly difficult for most of us.

Live in Ridgewood, N.J.? You might be out of work

Ridgewood, N.J., recently won a dubious honor from BusinessWeek. The magazine predicted that the town would be one of those that would see the most suffering because of the country’s financial collapse.

Ridgewood is located about 25 north of New York City, and is home to many people who made their living on Wall Street as bankers, brokers, financial consultants and other money-related jobs. Today, according to an NPR story, the town is suffering. That’s because one in six residents works in finance or real estate.

This is a tough time to make a go of it in either of these fields. Both are shrinking.

Of course, if you’re good enough at something, and you work hard enough at it, the odds are good that you will do well, even if you happen to be working in what others would consider a dying field.

In Ridgewood, though, I’m sure there are a lot of folks who wish they hadn’t gotten those finance degrees right now. Of course, there are a whole lot of people across the country staring at their own college degrees and wondering why they can’t find a job.

Interested in working in a struggling field? Go for it

I’m working on a story for a major newspaper’s Jobs section. It’s an interesting one, taking a look at people who are entering certain career fields even though those fields are struggling mightily.

I’ve spoken to real estate agents and mortgage lenders, for instance. Both of these fields are going through tough times today. You can tell by all those houses in your neighborhood that aren’t selling.

It would seem like a bad time to jump into either career. But career counselors say this isn’t necessarily the case. At least the ones I spoke with for my story said that.

Here’s the reason: If you’re passionate about a career, or even if you’re truly interested in it, it makes sense to go after it, no matter how that field is doing at the moment. Take the mortgage loan officer. The mortgage-lending business is gasping right now. But a loan officer who’s truly passionate about the industry, who likes the thrill of working on commission and digging up business, is going to be the one who gets that business.

The loan officer who entered the industry during the housing boom because everyone was making a fortune originating mortgage loans, has probably already fallen into a new line of work.

What’s the lesson here? Do what you really want to do, even if people tell you it’s a dead-end industry.

The ax fell at work today

I just got off a conference call this morning with the powers-that-be at the publishing company where I work on a full-time/part-time basis. Like all publishers, this company, which covers real estate news, is struggling. So this morning, the company had its first round of firings.

I survived the cut. That’s the good news. The bad news, of course, is that some very talented people are out on the streets now. And finding a job at magazines or newspapers is not exactly an easy task these days.

At the same time, our now reduced editorial staff will be working harder for no extra money. I hate doing extra work with no corresponding extra pay. However, I feel that complaining about that now would seem insensitive since I’m still employed and so many others are not.

The bosses handling the firings, of course, did their usual stumblebum act. At one point, one of the bosses mentioned that these moves might increase camaraderie at our company. Yes, there’s no better way to increase camaraderie than by firing a boatload of employees.

Many of our sale staff survived the cut. I suspect that’s because most of them operate 100 percent on commission. Yes, they’re doing a horrible job and not bringing in any ads — that’s why we’re in this mess right now — but they’re not costing the company any money. In fact, the one salesperson that was let go was making half commission/half salary. What a surprise.

As usual, I’m not exactly happy with the vision of my bosses. I am happy to still have this job. But I will certainly be looking for a replacement full-time/part-time gig, to supplement my other freelance writing, just in case.

I advise everyone in every industry to be on the lookout for possible opportunities, too. I wouldn’t trust that your job is any safer than mine.