California’s Unemployment Rate Again Falls to Record Low in February

  • California added 14,000 jobs in February, and the unemployment rate dropped to 4.3 percent — the lowest level recorded since 1976, according to numbers from the state Employment Development Department. Over the last year, the state created 383,600 jobs, a 2.3 percent annual increase.
  • Industries that added the most jobs in February from the month before include professional and business services, up 8,300 jobs; construction, up 6,800 positions; and manufacturing, up 3,500 jobs. The educational and health services sector created 2,800 jobs; leisure and hospitality added 2,000 positions; and financial activities added 100 jobs. Of industries that reported job losses, trade, transportation, and utilities posted the largest decrease over the month, down 3,100 jobs; followed by other services, down 2,800 jobs; government, down 2,500 jobs; information, down 1,000 positions; and mining and logging, down 100 jobs.
  • According to The Conference Board Help Wanted OnLine data series, California’s job supply/demand rate was 1.53 for February 2018, suggesting more than one and a half jobs are available for each unemployed person, also an increase from a January. Seasonally adjusted numbers show an increase of about 30,000 job advertisements from February of last year.
  • A separate report issued earlier this month by the U.S. Bureau of Labor Statistics indicates that job openings jumped in January to a new cyclical high of 6.3 million. That brought the openings rate to 4.1 percent, in line with the highs of this cycle. Most major sectors had more openings than during the last cycle’s peak. In addition, the latest report suggests that more employees are switching jobs.
  • In the Bay Area, San Francisco and San Mateo counties continued to benefit from gains in the professional and business services sector, which added 10,500 positions over the last year. Computer systems design and related services followed, adding 4,900 jobs. Over the last year, the two counties added a combined 18,100 jobs. From the month before, education jobs led the gains, with private educational and health services showing the largest net increase of 2,000 jobs. There were about 1,000 fewer construction jobs in the area from the year before.
  • In Alameda and Contra Costa counties, the construction sector showed the largest percentage increase in jobs from last year. Overall, the area added 7,600 jobs from January and 25,400 year over year. Health care and social assistance drove 90 percent of the increase in private education and health services — 5,200 of the 5,700 jobs — while construction’s 5,600 new jobs were an annual increase of 8.4 percent. The unemployment rate in those two counties dropped to 3.3 percent in February, down from 4.1 percent a year ago. No sector posted jobs losses over the last year.
  • In Santa Clara and San Benito counties, the information sector led the gains over the last year, adding 8,500 jobs, in contrast to the rest of the state, where information jobs are declining. The region gained a total of 31,300 jobs in the last year. Other sectors that created jobs include professional, scientific, and technical services and health care and social assistance. Three other major sectors with significant annual gains are manufacturing (up 3,300 jobs), construction (up 3,000 jobs), and leisure and hospitality (up 1,900 jobs). No sector lost jobs compared with February 2017.
  • Marin County gained 2,100 jobs over the last year, bringing the unemployment rate to 2.5 percent. Sonoma County gained 5,100 jobs, with unemployment falling to 3.0 percent. Napa County gained 500 jobs over the last year, with February’s unemployment rate at 3.5 percent.
  • Los Angeles County added 23,900 jobs between January and February, with nine of 11 sectors showing gains, while the unemployment rate remained at 4.5 percent. Motion picture and sound recording positions saw the most significant gains, up 10,500 jobs. The large increase follows a significant drop seen in January. That sector has seen large variations, with jobs down 12 percent down from last February. Over the last year, Los Angeles County added 61,500 jobs. The top three industries include the leisure and hospitality sector, with 26,000 jobs added; accommodation and food services accounted for 14,600 new jobs; and arts, entertainment, and recreation created 11,400 jobs.
  • According to data released this week from the U.S. Bureau of Economic Analysis, Californians’ personal incomes grew by 4.1 percent in 2017 from the year before, a full percentage point higher than the U.S. overall. Only six states had stronger personal-income growth, all of which are located in the West. California’s per-capita personal income reached $58,272 in 2017, up from $56,308 in 2016. California’s income is the sixth highest in the nation. States with higher incomes are all located in Northeast.
  • The biggest contributor to income growth in California was the information sector, which accounted for 44 percent of the gain. In Washington State, the information sector was responsible for 49 percent to the income gain. That is important to keep in mind as information sector trends change, particularly with the 12 percent decline in jobs over the last year in California. Areas with continued growth in information jobs are Silicon Valley and Los Angeles, a trend that bodes well for local economies and wealth creation.

Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.


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Five Bay Area Counties Surpass All-Time Home Price Highs in February

  • The median sales price for a single-family home in the nine-county Bay Area was $893,690 in February, an annual gain of nearly 14 percent.
  • Home prices rose by double-digit percentage points in seven of nine Bay Area counties from February 2017.
  • The median sales price surpassed its previous peak in San Francisco, San Mateo, Santa Clara, Marin, and Sonoma counties.

The Bay Area posted double-digit percentage point annual home price gains last month, with five local counties setting new record peaks due to continually shrinking inventory conditions.

That’s according to the latest homes sales and price report from the California Association of Realtors, which puts the median sales price for a single-family home in the state at $522,440 in February, up 8.8 percent year over year. In a statement accompanying the report, CAR Senior Vice President and Chief Economist Leslie Appleton-Young said that rapid single-family home price appreciation is causing more buyers to opt for condominiums, pushing prices to a new record high of $461,400, an annual gain of 13.3 percent.

In the nine-county Bay Area, the median sales price for a single-family home ended February at $893,690, up 13.9 percent on a yearly basis. Prices rose in all local counties, with seven of them reporting double-digit percent year-over-year appreciation. Growth was highest in San Francisco and Santa Clara counties, a respective 35.6 percent and 25.8 percent.

San Francisco’s considerable annual appreciation pushed the median sales price to $1,730,000 — a new peak — to make it the state’s most expensive real estate market in February. Four other Bay Area counties also set record price highs last month: San Mateo ($1,610,000), Santa Clara, ($1,383,500), Marin ($1,371,000), and Sonoma ($689,000).

Although more homes in the nine-county Bay Area hit the market than in the inaugural month of 2018, the monthly supply of inventory was down year over year, ending February at 2.6. That trend mostly held true across individual counties, with only San Francisco seeing a very slight improvement from one year earlier.

Santa Clara and San Mateo counties had the fewest number of homes for sale in the state, with the monthly supply of inventory a respective 2.0 and 2.1. Those two counties also had California’s fastest pace of sales, with homes selling in a median eight days in Santa Clara County and 10 days in San Mateo County.

Despite tight supply conditions, Bay Area home sales increased by 7.1 percent from one year earlier in February, with every county except San Francisco registering gains. CAR President Steve White attributed the uptick in activity to rising mortgage rates motivating buyers to act before they move even higher. According to numbers from Freddie Mac, 30-year, fixed-rate mortgages averaged 4.44 percent for the week ended March 15, the first time this year they have declined from the previous week.


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U.S. Employment Growth Slows in March, as Weather Plays a Big Factor

  • Today’s national employment report from the U.S. Bureau of Labor Statistics did not live up to expectations, with the country adding 103,000 jobs in March and the report including a downward revision of 50,000 jobs for January and February. Over the last year, U.S. employers added 2.261 million jobs in total. The unemployment rate held steady at 4.1 percent, comparable to numbers recorded in 2000. While last month’s job additions alone may be disappointing, February’s strong gains — triple March numbers — may have pulled forward some of the growth. Still, the job market is off to a solid start in 2018, with an average of 202,000 jobs added per month during the first quarter.
  • Economists believe that large monthly job gains will be difficult to sustain at the current unemployment rate without significant retraining of the labor force and/or wage growth.
  • Furthermore, low March numbers are mostly due to large fluctuations in construction and retail jobs. The construction sector added 65,000 jobs in February, then lost 15,000 in March due to weather patterns — particularly in the Northeast, where winter storms hit hard last month. Still, the U.S. construction sector has seen solid growth this year, adding a total of 78,000 jobs. The retail sector saw similarly large variations.
  • The manufacturing sector added the most jobs in March at 22,000, with the gain entirely in the durable-goods industry, especially in fabricated metal products. Over the past year, the manufacturing sector has added 232,000 jobs, with durable goods accounting for about three-quarters of the growth.
  • Over the last year, the professional services and health care sectors added the most jobs, followed by hospitality, manufacturing, and construction. Information was the only sector that lost jobs over the last 12 months. However, the information sector has fared a bit better in Silicon Valley, where it posted some gains over the last year. Overall, California’s information jobs have been declining, though overall job gains have been broad across all industries.
  • While job gains have remained solid, much-anticipated wage growth has been slow to follow. In March, hourly and weekly wages inched up, though weekly wages rose at the fastest pace since 2011. Wage growth has been especially strong in the finance industry, where weekly wages jumped 6 percent from one year ago. All other industries showed wage gains of less than 4 percent, with the average across private-industry jobs at 3.32 percent. Construction showed the second-highest increase after finance, at 3.96 percent. Strong gains in finance wages have partially driven demand for homes in San Francisco and the rest of the Bay Area.
  • Participation in the labor force is another closely monitored job indicator, and it has been rising since bottoming out in 2014. The share of prime-age population in the labor force — those between 25 and 54 years of age — is now at 82.1 percent. While not increasing in March, labor force participation growth has generally been strong over the past year. Greater labor force participation indicates that workers are encouraged by higher wages and more job opportunities.
  • Another report on job opportunities, the Job Openings and Labor Turnover Summary report from the U.S. Bureau of Labor Statistics, shows that the number of openings increased to a series high of 6.3 million at the end of January, up by 645,000 from December 2017. The number of job openings increased the most in professional and business services, up 215,000; transportation, warehousing, and utilities, up 113,000; and construction, up 101,000. The fact that most openings are in the professional and business services sector suggests that there are more jobs than qualified employees.
  • Tech companies created 9,000 positions in March according to CompTIA, led by IT services and custom software. Data processing, hosting and related services, computer and electronics manufacturing, and other information services (including search portals) also added jobs in March. IT job listings were also up a notable 27,700 from February to a total of 137,000 open positions. Almost half of the openings are for software and application developers.

Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.


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How Much Do You Need to Earn to Live in Each Bay Area County?

While mortgage or rent payments will constitute the biggest expense for most Bay Area residents, there are of course many other cost-of-living factors to consider. Using the Economic Policy Institute’s Family Budget Calculator, which determines how much money a household must make each year to maintain an adequate standard of living, we determined the cost of living in all nine Bay Area counties for single people and for a family with two children.

Costs included in income numbers below include housing, food, health care, child care (if applicable), transportation, other necessities, and taxes, but do not include factors such as saving money or paying off debt.

Alameda County

  • Single: $56,505 annual income (monthly housing costs, $1,517)
  • Two adults, two children: $121,922 annual income (monthly housing costs, $2,294)

Contra Costa County

  • Single: $58,827 (monthly housing costs, $1,582)
  • Two adults, two children: $125,672 (monthly housing costs, $2,393)

Marin County

  • Single: $73,138 annual income (monthly housing costs, $2,074)
  • Two adults, two children: $155,031 annual income (monthly housing costs, $3,214)

Napa County

  • Single: $47,365 (monthly housing costs, $1,005)
  • Two adults, two children: $102,776 (monthly housing costs, $1,575)

San Francisco County

  • Single: $64,666 (monthly housing costs, $1,926)
  • Two adults, two children: $141,320 (monthly housing costs, $2,984)

San Mateo County

  • Single: $73,526 (monthly housing costs, $2,136)
  • Two adults, two children: $156,292 (monthly housing costs, $3,310)

Santa Clara County

  • Single: $61,549 (monthly housing costs, $1,716)
  • Two adults, two children: $129,092 (monthly housing costs, $2,522)

Sonoma County

  • Single: $51,729 (monthly housing costs, $1,224)
  • Two adults, two children: $109,977 (monthly housing costs, $1,843)

Solano County

  • Single: $41,817 (monthly housing costs, $874)
  • Two adults, two children: $89,441 (monthly housing costs, $1,341)


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Most Americans Believe They Are Adept at Home Repairs — Particularly Millennials

  • Millennials are more likely than other generations to consider themselves handy around the house.
  • Millennials are also more likely to undertake repairs themselves than baby boomers or Gen Xers.
  • Nearly one in five millennials cannot discern a flat-head screwdriver from a Philips-head screwdriver.

Millennials are more likely than other generations to describe themselves as handy around the house, although they actually have the least experience at do-it-yourself projects.

That’s according to survey results from, which assesses the household handiness of baby boomers, Gen Xers, and millennials. More than 69 percent of the latter group describe themselves as handy, compared with about 61 percent of Gen Xers and baby boomers. Male millennials were even more likely to tout their home-maintenance skills, with nearly 79 percent calling themselves handy.

Millennials are more likely than older generations to make repairs themselves, cited by 55 percent of respondents in that age group. Millennials are also three times less likely to call a handyman than baby boomers, perhaps deterred by costs.

But when it comes to actual hands-on experience, millennials have less experience than older generations in 13 of 21 home-repair tasks that tracked. Projects that millennials have more experience in tend to involve technology; 86 percent have set up a Wi-Fi router, and 60 percent have installed a television.

Millennials also have less knowledge of common household repair tools than baby boomers of Gen Xers. Nearly 20 percent of millennials did not know the difference between a flat-head screwdriver and a Philips-head screwdriver. They were also less able than older generations to identify Allen wrenches, air compressors, hacksaws, and C-clamps.

Even if they may not have as much repair and remodeling know-how as older generations, millennial homeowners are pumping a significant amount of money into the home-improvement industry, an average of $26,000 per year.

(Photo: iStock/kali9)

Shared with permission from the Pacific Union Blog

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Pacific Union Hires Stephen Pugh to Lead Commercial Business

Pacific Union is pleased to announce that it has tapped seasoned real estate industry leader Stephen Pugh as president of the brokerage’s commercial operations in the Bay Area and Southern California.

Pugh comes to Pacific Union from his position as president and CEO of Paragon Commercial Brokerage. Prior to joining Paragon Commercial Brokerage, Pugh was managing director, for Alain Pinel Investment Group. For the past 24 years he has served as president of the Income Property Marketing Group, the Bay Area’s largest networking orga­nization that promotes the sale of commercial and investment properties.

The move marks a homecoming for Pugh, who began his career with Pacific Union in 1989. Under his leadership, Pacific Union’s commercial operation is projected to close more than $2 billion in investment trades in the upcoming year.

“It is amazing to come home to the brokerage that gave me my start,” Pugh says. “The incredible dynamics and future growth of this brokerage is phenomenal.”

“We are very happy to welcome Steve back to Pacific Union,” Pacific Union President Patrick V. Barber says. “He is a proven leader in commercial real estate with more than 25 years of experience. His drive and talent in building effective teams has led to billions in sales volume in multifamily and commercial properties in the Bay Area.”


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Pacific Union Again Moves Up the Rankings of the Largest U.S. Real Estate Brokerages in 2018

Pacific Union is excited to share the news that our firm has once again advanced on the list of the largest residential real estate brokerages in America, a testament to the hard work and expertise of our elite team of professionals in the San Francisco Bay Area and Los Angeles County.

The latest rankings from noted industry publications REAL Trends and RISMedia place Pacific Union as the No. 5 largest brokerage in the country in 2018, with more than $14.1 billion in sales in 2017, up from No. 8 in 2016. The brokerage grew total sales by 39.3 percent in the past year, while increasing average sales price by 11.4 percent. We are now the largest independent residential real estate brokerage in California, as well as in the Bay Area and Los Angeles County.

Pacific Union has consistently ascended the rankings of the two noted industry publications for the past six years: No. 18 in 2012; No. 14 in 2013; No. 13 in 2014; No. 9 in 2015 and 2016; and No. 8 in 2017. Company CEO Mark A. McLaughlin, who purchased the brokerage in 2009, attributes the company’s success to maintaining a focus on culture and recruiting California’s best and brightest real estate professionals.

“Nearly nine years ago, we had a vision of returning Pacific Union home, back to the roots of its founders: entrepreneurs; risk takers, and a people-first, results-based culture,” he says. “The talented people we have attracted to our organization are reflective of this vision, and each one of us feels a passion for our cause and take pride in our collective accomplishments.”

Pacific Union has fueled its significant sales volume growth and expanded its California footprint over the past 15 months through strategic mergers with top Los Angeles brokerages John Aaroe Group, Partners Trust, and Gibson International. The brokerage now has more than 1,700 of California’s top real estate professionals in more than 50 offices throughout the state, including a newly opened location in Los Angeles’ Hancock Park neighborhood.

The industry has also recognized Pacific Union for its global efforts, with International Property Awards naming it World’s Best Real Estate Agency With More Than 20 Offices for the year 2017-2018. Pacific Union has gained significant international traction via its China Concierge program, started in 2013, as well as through a global digital marketing campaign that delivered more than 100,000 overseas impressions to its website.


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Bay Area In-Migrants Are Younger and Earn More Than Out-Migrants

  • Between 2005 and 2016, people moving to the Bay Area earned almost $13,000 more per year than those leaving.
  • Bay Area in-migrants are about two years younger than out-migrants, as many Americans find the region a difficult place in which to start a family.
  • Roughly 10 percent more people migrating to the Bay Area had four-year college degrees or higher than those moving away.

Young couple in moving truckOver the past decade, expensive coastal metropolitan areas with thriving economies and limited housing stock have attracted younger, more educated, and higher-paid Americans, pushing other residents out and keeping home prices elevated.

That’s according to a new analysis by BuildZoom Chief Economist Issi Romem, which examines a trend he calls “positive income sorting.” This pattern indicates that income differences between people moving into pricey U.S. coastal cities and those moving away is more pronounced than in other areas of the country.

As the nation’s most expensive place to call home, Romem says that the Bay Area serves as an extreme example of positive income sorting. Between 2005 and 2016, households moving to the San Jose-San Francisco-Oakland metro area earned median annual incomes of $70,015, which is $12,640 more than those who left the region. Other high-priced coastal metro areas such as Los Angeles and New York display similar trends.

People migrating to the Bay Area are also slightly younger than those who are moving away. During the aforementioned 12-year period, those moving to the region had an average age of 38.6, compared with out-migrants, who were almost 41 years old.

Similarly, Americans who are moving to the Bay Area to take advantage of the region’s booming economy are more likely to be educated than those who can no longer afford to live here. Sixty-percent of in-migrants who were head of a household had a four-year college degree or higher, while slightly less than half of those leaving had the same.

Romem says that positive-income-sorting trends suggest that Americans move to high-priced coastal cities when they are young, then flee to less expensive areas of the country once they are ready to start families. He told The Mercury News that the Bay Area’s extreme cost of living makes it “almost impossible for many families to put down roots.”

Positive income sorting helps sustain home price growth in coastal job centers, but it could also jeopardize those cities’ economies by forcing employers to keep only the most productive positions that pay well enough to compensate for the high cost of living. The answer, Romem says, is of course to build more housing in these areas, a process that can unfortunately can be quite difficult in California according to recent research from John Burns Real Estate Consulting.

(Photo: iStock/kali9)

Shared with permission from the Pacific Union Blog

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Most Homeowners Are Planning a Remodeling Project in 2018

  • Fifty-eight percent of homeowners will funnel money into a home-improvement project this year, according to a recent poll.
  • For the fifth straight year, outdoor renovations are the most popular with homeowners in 2018.
  • Twice as many homeowners are improving their properties so that they can age in place than those who are renovating in advance of a sale.

Nearly six in 10 U.S. homeowners are planning to spend money improving their properties this year, and an even larger amount will do at least some of the work themselves.

LightStream’s 2018 Home Improvement Survey found that 58 percent of homeowners will spend some amount of money to better their properties this year. Almost half are expecting to spend $5,000 or more on renovations, an all-time survey high, while the number of owners who will shell out $35,000 or more doubled from last year.

For the first time ever, LightStream asked respondents about “sweat equity,” meaning adding value to one’s home by making improvements via personal physical work. Nearly two-thirds of owners planning a renovation will do some of the work themselves, and 35 percent will complete the entire job without professional assistance.

LightStream says that outdoor renovation projects — such as decks, patios, and landscaping — are the most popular for the fifth straight year, cited by 43 percent of homeowners. A bathroom remodel was the second most common renovation (31 percent), followed by general repairs (28 percent) and kitchen overhauls (26 percent).

Here in the Bay Area, homeowners thinking of remodeling their kitchens or bathrooms should be prepared to dig deep. Two separate Houzz studies published within the past six months found that San Francisco homeowners can expect to incur the largest bills in the nation to complete bathroom and kitchen remodels.

Speaking of funding home-renovation projects, LightStream found that 62 percent of respondents plan to use their savings accounts to improve their homes. Thirty percent will use credit cards, 13 percent will tap into their home’s equity, and 10 percent will take out a loan.

One final finding from the survey: The desire to remodel a home is not necessarily driven by plans to put it on the market. Just 7 percent of those polled are renovating because of an upcoming sale, while twice that amount — across all age groups — are bettering their home so that they can age in place.

(Photo: iStock/Kerkez)

Shared with permission from the Pacific Union Blog

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