patrick.net

The job market is currently doing fine in BA. The housing prices depend not just on the current job market, but also about people's perception of job security. In BA, I argue it heavily depends on stock market - which is not just proxy for economy to most, but is THE economy.

In stock market, it's "happy Days Are Here Again", till the next panic selling which can happen tomorrow when the market opens.

So, if the stock market crashes, or continues to have mini-crashes, it will seriously affect the psychology and hence the housing prices. Jobs may not be a leading indicator. Of course, without prospects of IPO, VC funding may dry up too, seriously affecting the job market.

Even without the suffering of economy/stock market, jobs can stagnate. And that has been my position for a while now. So while I don't see massive problems, but I don't see any pay rises on the horizon.

Another factor - maybe more important than jobs - is mortgage rates. I have been wrong on this, completely wrong, till now. Rates have stubbornly stayed low. So I am not going to predict when they will again be at 8%. But if it happens, then bye bye housing prices, even with a strong job market.

What industry are you in? What is the outlook for your niche? What are your employers doing? Don’t name any employers, just share general information about what the hiring trend is for late 2007 and beyond.

I work at a Fortune 500 tech company. The outlook for my niche is very bright. Hiring qualified software engineers is freakin' hard right now. A few of my friends in my and other companies have gotten fairly dramatic increases either via raises or by changing companies. (10%+)

Oh yeah, I'll also add that VCs are desperate to give out money. But I think we all noticed that from the Web 2.0 hoopla.

I work for an Internet media company, a big one. It is hard to hire good programmers right now, so I am trying to hire people in China. It is a big hassle hiring people overseas, but Chinese programmers make something like 1/6th of American ones, so the it is hard not to at least try.

I had three unsolicited job offers this week--everyone I have ever worked for seems to want some of my time right now. This is across several different lines of work, not all tech. Sounds as though it is hard to get good help these days. So...things are looking OK from here, at least at the moment. Having lived through the last tech boom and bust cycle in the Bay Area, I am now squirreling away money so that when the party is over--and I know the party will end sometime--we can leave if we like and perhaps take some start-up capital with us. However...the party got pretty crazy before it ended last time, and while it will be different every time, I have yet to see the disconnect from economic realities that characterized the latter days of the last boom cycle.

Prices will drop only if jobs disappear

I would accept the statement without the 'only' (which of course completely reverses the cause and the effect).

spam, already... how did they get through?

Different Sean Says:
spam, already… how did they get through?

I deleted them.
SP

Jon,

That's referred to as the "Vanity Plate Index".

It's a lesser known component of the Consumer Confidence Index. Randy H could probably explain it a lot better than I could though. Kind of goes hand in hand with the "Mistress Index" only without the strong correlation to apt. rents in Lower Manhattan.

industry: healthcare/surgical-primarily elective
caseload: down slightly-may or may not be related to the economy at large
challenge: recruiting young doctors as older doctors retire, cost of living unattractive

SP

To date Wall Street has done a great job washing it's hands of the HB. Like the front row of a fashion show we're truly bedazzled as each new model makes her appearance only to "fall in love" all over again 30 seconds later. In short... "we" have the attention span of a gnat!

REIC's job problems are REIC's job problems. (We're movin' on) Whadda want from ME?

I'm with you, whatever the former loanowner's problems were, they're not my problems. My entry point is what matters to me. If the neighborhood happens to "be oddly quiet" for a time, I can live with that. When "the next big thing" comes along things will liven up a bit.

Then it's no longer, Jobs, jobs, jobs

(It's Girls, girls, girls!)

I work at a company that writes software for consumer electronics.

We just had a hiring spate in late 2006 early 2007, and we're in a holding pattern for hiring right now, because we're worried about growing too fast into a possible recession.

Consumer spending cuts will definitely affect us, so we're cautious right now, but pretty excited about our products. We also have income, not just vaporware. :)

Also, this makes me mad :

Ms. Bair told reporters that many times it is in the interest of investors as well as borrowers to work out new loan arrangements to avoid foreclosure because the cost of seizing and reselling the homes is high. She suggested that some investors may allow borrowers to maintain low "starter" interest rates to prevent defaults when the rates suddenly adjust to higher market rates.
"I don't think they really will be harmed if the starter rate is just continued." she said. "What's the alternative? Foreclosure, and then they face much bigger losses."

It's from this article.

Yes, the solution is to give those irresponsible idiots permenant teaser rates.

I agree with most of what others are observing. The job market is, and has been for a while now, very robust. Not like the ridiculous late 90s boom times, but just good solid normal good.

My wife works for one of the larger public software companies and she has been importing hires (finance & accounting) from elsewhere in the country since she can't find talent locally. This has been the case for 2 years now.

I see the VC and Angel side of things and there is more money flowing into startups than many people realize. There really is too much money looking for deals. But it's not really like the late 90s boom in VC either. I'd say the number of stupid funding deals to reasonable ones is maybe 1:10 where in the 90s it was 9:10. There is a big difference with the Web 2.0 companies: many of them already have profit, and those that don't have believable business plans. I don't think it's time to call a Web 2.0 bubble yet.

I also think things will slow down by the end of the year, but I don't think this spells recession, just slowing growth. That means job losses mostly through attrition, which also means companies will still be hiring, just not net adding jobs.

Specifically the charge that Web 2.0 companies will start to flounder late in the year goes against the funding cycle of when most of these companies were funded. Except for the few very early ones funded in 2001-2002, most of these startups have at least a year or three left in their investor's portfolio life cycle. That means many will get additional rounds so long as they aren't declared dead. Some may get sold, but the nexus of acquirers are also BA companies so acquisition doesn't automatically translate into the area fully losing those jobs.

The husband works for a large japanese games developer - so - like in so many other depressions, I'd wager that his job is pretty secure.

IIRC one of the few growth industries during the Great Depression and WWII was the entertainment industry - people needed a break from the woes of the day, so flocked the the movies. My bet is that games serve much the same purpose today, so while not totally recession-proof, he has a better chance than most at keeping his job.

As for me, I have my finger in so many pies at the moment - website design, animation, crafts, and all from home - that if I lost one part of it, i'd be able to find another way of making a buck. I have a slew of hard science skills, so could go back to database management/statistics if I really had to.

If we suddenly faced his redundancy, we've got enough savings to tide us over for a few months, and I'm not too proud to go and find a job doing menial work. Although I'm a bit old and creaky, I've done everything from wait tables, worked in factories and even been an agricultural worker - I'd gladly go back to manual labour if the $hit hit the fan.

We rent, have no debt, and live well within our means. If push came to shove I'd dig up our back yard, plant it with vegetables and raise chickens. We'd never starve.

Bork

Are you a developer in telecom software? If your comfortable, what's your profile. I know someone desperately looking for telecom software talent in the area -- who's currently exploring on-shoring elsewhere in the country half because he can't find the talent here.

Perversely, this is actually also used as a spurious justification not to hope for a drop in prices -

Proof by denial, as it were.

I agree the argument is being used fallaciously by most realtors, who're just parroting rhetoric anyway. However financially it is not a self contradicting because jobs and the housing market form a reflexive system.

There is a company that produces high end bicycle bearings and other parts, that chose to move out of the bay area a few years ago. They faced the problem of not being able to pay the salaries required to own a home, raise children and so forth, in the BA. Consequently, attracting and keeping qualified engineers and people with other needed skillsets, was a challenge.

The company moved to Redding but then suffered a loss of "talent" as employees left because they didn't like the extreme summer weather of Redding. Now they couldn't find qualified new hires that wanted to live there.

A second move to Portland OR seems to have fit the bill for this company. So, I wonder how many companies today are considering a move, for similar reasons. Or maybe there are businesses here that foresee some relief in this houseing market downturn.

Afterall, the lowering of the cost of living without a drop in salary, is like getting a raise, right?

Well, the company my husband works for want to hire more people, but are finding that everyone they interview are on much higher wages and benefits than the company are paying their own people currently. Biotech.

They are also thinking of outsourcing to China - cheap labor.

I agree with the observations of most here. I'll add a couple wrinkles from my particular perch.

I work as a librarian in a large law firm and we've been flooded with web2.0 datamining and RSS outfits. Right now my firm subscribe to 4 or 5 SEC datamining services (on top of their direct access via Lexis and Westlaw). The independent outfits will either be bought out or die. Most of the jobs there will be gone or outsourced. I was talking to a woman yesterday who had worked at Westlaw and she said that West has outsourced their indexing service to India.

I don't think a lot of the legal service jobs will be here in the long haul, especially jobs not directly in contact with lawyers. There's lots of protection for lawyers and people who work directly under them due to US bar associations and confidentiality issues. But even there, I've read about big firms outsourcing support staff to West Virginia and so on.

I will say, outside of very lucky surviving few, the dot.com bust cleared out a lot of incompetent IT people. My dad said very few companies are willing to train anymore. The pay for good skills is quite good and there's a lot of demand, but you have to have a good skill set to get those jobs.

Astrid,

Amen. I was working in the dot coms (the wrong ones, unfortunately. WHY did I turn down Google?) back then, and the mouth breathers that were allowed to call themselves web developers back then truly boggled the mind.

They are back to flipping burgers again. Sweet.

Steveoh,

Yeah, watch out BA! Pretty soon the obvious appeal (10 months of BLAH weather) and our "infinitely cheaper cost of living" and there won't be a bicycle ball bearing mfr. LEFT in the BA!

All your chrome ball bearing.... things are belong to MUGGY!

Seriously, this was reported as a "major score" by the local media. I know, I know. We can have the jobs but the "Critical Mass" clowns go with the deal! I know. :(

Law related Web 2.0 outfits are tiny and don't absorb a lot of workers.

SFBB,

Unfortunately, the remaining deadwood is concentrated in defense, homeland security, and places like Fannie Mae. My dad still have to work with these types of people as a contractor. Those people are worse than worthless.

Furthermore, the 4.6% rate is still more than 2 full percentage points above 1999 and 2000 levels.

2.6% unemployment rates were an aberration and a very bad thing. 2.6% is _below_ full employment levels, and means there was a negative "real" unemployment rate. Keep in mind that unemployment rates include at least 2.5% of churn and most people think another 1-2% of "uncounted workers". Uncounted workers drop out of the tally because they are inactive too long. This means that women taking a couple years out to raise kids, people on year long sabbaticals, people doing independent consulting to fill the gap while they wait for one of those hard-to-get jobs fall out of the measure.

4.6% is pretty close to full employment. Anything more and we'll get another annoying boom and burger flippers will start pretending to code Ajax.

Randy -

"My wife works for one of the larger public software companies and she has been importing hires (finance & accounting) from elsewhere in the country since she can’t find talent locally. This has been the case for 2 years now."

Im in Finance for SW company. Here is the rub, due to SOX Internal Control (segregation of duties) you have to hire more people than you need. That is why its said, SOX is expensive. Your wife can explain this to you far more. From the lowely staffer up to CFO you are required to have someone looking over your sholder checking your doing everything correctly, and someone else is looking over theirs.

There isnt a shortage today, there is however a misallocation and loss of common sense in the profession. How many accountants does it take to screw in a light bulb... far more than needed because of goverment regulation.

"San Jose’s unemployment rate of 4.6%"

thats because over 300,000 people left the BA.
We are down to 840,000 in workforce today. The same number as
was in 1991.

Is it a good time to change industry? How do people take the leap psychologically?

Ha Ha Says:
Borland to Relocate Corporate Headquarters to Austin

I hate seeing this happen. Borland has been in BA for decades.
We already lost 3com and a good chunk of top Fortune 50 R&D centers.

High home prices are to blame.

"Some young IT guys believe in work-life balanace."

We have prezals and Pepsi in the frig at work. Some left over Pizza
from last night too.
When you get down to it, the real IT and Devoplers love
working 50-60 hours a week with very little outside
activity. This is what motivates them. You wont see them at a
Sharks Game.