Monday, Oct. 29, 2007

Industries tied to the housing market slow, let workers go

The valley's housing woes have triggered an employment collapse in some industries closely tied to the market, resulting in a string of cutbacks at companies that flourished during the boom years.

Mortgage companies and title insurance firms are closing branch offices and shedding employees by the dozens. Some real estate agents have walked away from the business. Others are hoping to weather the downturn and emerge as savvier professionals.

Construction firms are scrambling to find commercial or industrial work to offset the slowdown in residential building. General laborers who used to spend their days nailing together houses are shifting to other fields, some returning to the farm fields in which they worked before construction offered a better-paying alternative.

Since the start of the year, more than 40,000 workers nationwide have lost their jobs at mortgage lending institutions, according to data compiled by global outplacement firm Challenger, Gray & Christmas Inc.

Construction companies have announced nearly 20,000 job cuts this year, while the National Association of Realtors expects membership rolls to decline for the first time in a decade.

Title companies were dealt a serious blow when the market turned, said Terry Harwell, division president of Alliance Title Co. in Stanislaus County. Transactions at the firm have plummeted 40 percent a year for the past two years, forcing the company to lay off employees and scale back operations.

Harwell opened the first Alliance office in Modesto by himself in 2000. The company had swelled to 165 employees in 10 branch offices throughout the county by the real estate market's peak in the fall of 2005.

The downturn forced the company to reduce its staff by about 65 percent and shut three branch offices. The remaining 50 employees have taken a 10 percent pay cut. Though the company hasn't done away with employee incentives as have other title firms, Harwell is bracing for another tough year.

"We may end up with more consolidation and branch closures," he said. "The Realtors are doing the same thing, and lenders are closing offices and consolidating. Everybody is just trying to put themselves in a position to go forward in the next year and be in the black."

For real estate agents in par- ticular, he said, times are ex- tremely tough. "A lot are going hungry," Harwell said.

Less time rather than more

Oscar Dominguez, 41, was one of them. The former agent for PMZ Real Estate got into the business in 2005, after spending more than two decades working in retail sales.

Dominguez thought it would free up more time to spend with his family, but instead found himself racing around to houses on the weekends and putting in 60-hour weeks. Then the slowdown hit.

"My timing couldn't have been worse," said Dominguez, who sold two houses during his tenure and now is training to become an electrician at Modesto Junior College.

"It was tough. I was fortu- nate enough," Dominguez said. "There's some agents who didn't even sell two houses, like I did. Even established agents right now are struggling."

People joined the ranks of real estate agents in droves during the good years, hoping to snag a piece of the action when houses were practically selling themselves. The number of people with active real estate licenses in Stanislaus, San Joaquin and Merced counties nearly doubled from 2004 to 2006, jumping from 5,800 to 11,500.

They are leaving almost as quickly as they got in. This year, there are about 2,000 fewer agents with active licenses in the region than last.