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ORANGE COUNTY, CA-Non-farm unemployment for the county was down to 7% in November 2012, as compared to a revised 7.2% in October 2012, and also below the year-ago estimate of 8.1%, according to a report from the Employment Development Department's Labor Market Information Division. The rate compares favorably with the unadjusted unemployment rate of 9.6% for California and 7.4% for the nation during the same period.
Of the jobs gained, leisure and hospitality reported the largest unemployment-rate decline (down 1,000 jobs), with all the employment loss from this category in the arts, entertainment and recreation. Month-over-month declines also occurred in other services, manufacturing and construction. In fact, between November 2011 and November 2012, leisure and hospitality led the year-over-year gain by adding 7,100 jobs.
As GlobeSt.com previously reported, with regard to commercial real estate, job growth is mainly coming from the mortgage and financial-services/banking sectors, thanks to low interest rates, Jeff Ingham, senior managing director for Jones Lang LaSalle, tells GlobeSt.com. “I tend to think that it's relatively short-lived, since these areas are all expanding based upon low interest rates and refis. As interest rates go up, no one is going to be refinancing. When the market changes again, there will be a decline in the mortgage industry—it's just a matter of one to three years out.”
Still, for the moment many finance companies, including Greenlight Financial and CashCall, are taking additional space in Orange County, so Ingham is cautiously optimistic. “We also have life-science jobs, and I still see a lot of that job growth. The employment base is medical-device oriented, and I thank that's going to continue to grow.”
Construction jobs are also adding to employment growth in the county. “There's a lot more residential development going on.” says Ingham. “A lot of land sites are being converted from office or industrial uses into multifamily. There have been a lot of big transactions for land—the Irvine Co. is buying a large parcel at Park Place, and we're seeing a lot of multifamily investment sales along Beach Blvd., in Huntington Beach and North County.”
Ingham adds that in South Orange County, a residential developer can get more money per land foot for residential use than for other sectors. “Cities are tending to pack a lot more density in residential developments, and there's an increasing price per door, which relates back to price per foot. This is significantly more than office or industrial right now, and I see that trend continuing.”
While he does see many clients looking to move jobs out of California due to Prop 30, on which GlobeSt.com previously reported, “I do sense we're going to still have a lot of people moving into the county as it becomes much more labor oriented with higher-wage jobs.”
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*chart courtesy of the State of California Employment Development Department's Labor Market Information Division
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
