The coronavirus continued to have disparate effects on real estate in December, with some sectors continuing to shrink while others regain ground.
A rise in Covid cases and government closures of indoor dining contributed to a loss of nearly 500,000 leisure and hospitality jobs. Restaurants and bars accounted for 372,000 layoffs.
Nearly half of all restaurants expect further layoffs in the next three months, according to a recent survey. In New York, 78 percent of restaurants anticipated layoffs.
Overall, the economy lost 140,000 jobs last month, ending seven months of economic growth, according to government employment data. The unemployment rate remained at 6.7 percent.
Holiday shopping provided a reprieve to retailers in December. Consumers supported the return of 120,000 retail jobs, although the industry currently employs 411,000 fewer people than it did last year.
The rise of e-commerce has resulted in an industrial real estate boom while the pandemic remains a drag on brick-and-mortar outlets. Macy’s recently announced it will close 125 stores over the next three years; Bed Bath & Beyond said it will close 200 in the next two years.
Residential homebuilding helped the construction industry add 51,000 jobs last month. Active listings for homes in the U.S. have reached an all-time low while home prices climbed to record levels. In November, spending on new single-family homes was up 18 percent year-over-year and single-family housing starts reached levels not seen since 2007.
“The lack of inventory is the biggest constraint to further growth in home sales this year,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association. “More workers in the sector should support the faster pace of housing construction the market needs,” he said.
A national shortage of available homes predating the pandemic has drawn the attention of investors, who are building new homes en masse to rent.
Warehousing and storage facilities added 8,200 jobs last month. About 5,000 jobs were gained by rental and leasing services providers.
Job gains in November were stronger than previously estimated. The economy added 336,000 jobs that month instead of the 245,000 first reported.
But these numbers pale in comparison to the 22 million jobs lost in March and April of last year. While 12 million have been recovered, overall employment remained 9.8 million below February’s level.