In Dallas, Job Growth = Housing Demand

To figure out how the local property market is doing, Steve Brown of the Dallas Morning News uses a simple equation: jobs = real estate demand.

There is no better gauge of how many new homes need be built than to measure the growth of the local employment market and the people who will be in need of Texas mortgage loans as a result.

The early numbers for the 2006 Dallas-Fort Worth job market range from good to even better. The D-FW area gained about 65,200 jobs last year, according to the preliminary statistics from the Texas Workforce Commission.

That’s about the same employment gain seen in 2005 but is well below what was expected early last year. During the first three months of 2006, the labor market was growing at an annual rate of more than 90,000 jobs.

But for myriad reasons, the local economy cooled off as the year wore on. Not surprisingly, the Dallas housing market followed suit.

Nevertheless, economists with the Federal Reserve Bank of Dallas estimate that that Dallas-Fort Worth employment increased by more than 81,000 last year.

Only the Houston housing market, with 89,900 new jobs, had higher growth in 2006, according to the Fed’s projections.

Looking ahead to 2007, most economists are predicting a slowdown in job growth as the economy moderates. As the housing market slump and higher energy costs continue, fewer people will be applying for mortgage loans.

To keep building home sales cranking, as well as office buildings and shopping centers at the current rates, real estate developers will need to see job growth remain near current levels.

Housing analysts estimate that one new housing unit is needed for every two jobs created, a landlords need workers to fill the more than 40 million square feet of empty office space on the books in Dallas-Fort Worth.