{"id":1634,"date":"2026-05-07T15:15:26","date_gmt":"2026-05-07T15:15:26","guid":{"rendered":"https:\/\/siliconvalleymovingpost.com\/?p=1634"},"modified":"2026-05-07T15:15:26","modified_gmt":"2026-05-07T15:15:26","slug":"whats-next-for-california-home-prices-watch-the-job-market-2","status":"publish","type":"post","link":"https:\/\/siliconvalleymovingpost.com\/?p=1634","title":{"rendered":"What\u2019s next for California home prices? Watch the job market"},"content":{"rendered":"
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Jobs. Jobs. Jobs.<\/p>\n

That\u2019s the secret sauce for California home prices.<\/p>\n

Far too often, housing analysis ignores job creation. Yet the importance of employment to homebuying math is fairly simple to me: if you don\u2019t have a paycheck, or you\u2019re just worried that your household\u2019s current income stream is in jeopardy, you\u2019re not buying a house.<\/p>\n

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To prove my point, the trusty spreadsheet looked at California job growth dating to 1990, using Bureau of Labor Statistics data, and compared that with Golden State home values, as measured by a Federal Housing Finance Agency price index. These years were ranked by the pace of job creation and sliced into three groups.<\/p>\n

First, think about the slice covering the boom years. The 12 years with the fastest employment growth saw bosses statewide increase staffing at an average rate of 3% per year. In those same years, California home prices averaged 8% annual gains.<\/p>\n

Now, contrast those upswings with the weakest job markets.<\/p>\n

Over those 12 slump years, bosses were shrinking their workforces at an average rate of 1% per year. Meanwhile, home prices also fell by an average 1%.<\/p>\n

That\u2019s a fairly stark lesson that paychecks matter to home prices.<\/p>\n

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Face the nation<\/h4>\n

Let me assure you, these jobs vs. home prices patterns are not just a California quirk.<\/p>\n

Let\u2019s ponder similar results on a nationwide scale.<\/p>\n

Peek at the 12 best years for U.S. job growth, years when employment expanded at an average 3% annual clip. In the same period, home prices rose by 6% yearly.<\/p>\n

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Yet in the worst years for employment creation since 1990 \u2013 periods averaging 1% job losses \u2013 home prices increased by just an average 2%.<\/p>\n

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Look, job creation is a decent yardstick for housing demand. Not all jobs lead to buying a home, but a steady salary is a start.<\/p>\n

One caveat is the oddly painful relationship between jobs and home prices for anyone seeking a housing bargain. Home values have a habit of falling just when your job security may be dipping, too.<\/p>\n

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com<\/em><\/p>\n

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