Home of the Week: Beautifully updated 1928 Hancock Park estate

The easy grandeur of California’s Golden Age is treasured and sensitively updated in this majestic Mediterranean estate. The home is located in one of the most desirable enclaves in Los Angeles, Hancock Park, at 511 South Arden Blvd.

All of the public spaces encircle a grand European courtyard, bathing the home in daylight and offering a setting for unparalleled entertaining.

Tall casement windows and doors throughout the home bathe the rooms in natural light. A turreted entry sets the stage with original Malibu tiled floor and staircase, decorative ironwork, and a chandelier hanging from a cupola surrounded by original stained glass windows.

The upper landing, a Juliette balcony, surveys
the living room below, offering a close-up view of the meticulously restored
hand stenciled cathedral ceiling. Off this grand room are a paneled library and
a family room wired for theater sound.

The sweeping formal dining room adjoins a vast,
sunny kitchen updated with Miele, Wolf and Sub-Zero appliances. Hand-painted
floors, a breakfast banquette and large windows brighten the ambiance. Broad
casement doors open wide to the courtyard with its vine-shaded dining area and
sun-washed seating patio. An en suite bedroom completes this level.

Upstairs, the master suite has a charming turreted sitting area and luxuriously appointed bath.

A second bedroom suite and two more bedrooms sharing an updated Jack & Jill bath are also on the same level. The pool area includes a sleek pool house exquisitely tiled for indoor/outdoor play, with a wet bar and bath. A generous guest house above has a living room, kitchen, dining area, bedroom, bath and laundry.

A private and gated motor court, one-car covered
carport, SMART home technology, Lutron multi-camera security, and Sonos wireless
home sound system add to the amenities.

Listed by Jill Galloway at $8,399,000, this is a timeless setting for quintessential California living.

SF sellers take homes off the market in anticipation of IPO


economic-straight-talk

Executive Summary:

  • Home sales activity continued with annual declines posting a 10
    percent year-over-year (YOY) decline in the first quarter.
  • However, San Mateo and Santa Clara see an increase in sales of
    homes priced below $1 million for the first time in 26 months, helped by the
    increases in inventories from previous months.
  • Sales priced over $2 million have slowed notably compared to
    2018, down 25 percent YOY in Q1, but still above 2017 levels.
  • For-sale inventories are up 14 percent overall with all regions
    having more inventory than last year.
  • However, after a short period of improved inventories, sellers
    in San Francisco took homes off the market in recent months waiting for IPO
    buyers – bringing inventories below last year’s levels in all price ranges.
  • Median home prices were down 3 percent YOY in March, mostly due
    to an increase of lower-priced sales compared to last year.
  • Santa Clara and Sonoma post relatively larger YOY declines in home
    prices, 12 percent and 8 percent respectively. However, 2018 spring prices in
    the two regions grew at unsustainable rates.
  • Bay Area housing markets have all the characteristics of a
    potentially robust home-buying season — more inventories, lower mortgage
    interest rates than last spring, motivated buyers and sellers, and possibly
    more IPOs in the pipeline.

Following a doldrum first quarter for housing market
activity in the Bay Area, potential impacts around Lyft and Uber’s already
filed IPOs and anticipated IPOs have started driving buyer and seller behaviors.

A look back at the first quarter activity suggests buyer
hesitation, which started in second half of 2018 and continued into early
months of 2019 bringing home sales down 10 percent below last year’s levels. The
largest monthly decline, however, occurred in March when sales dropped 14
percent, compared to 7 percent and 6 percent respectively in January and
February. In most all Bay Area regions, except Alameda, first quarter 2019 was
the slowest in last five years. The slump in sales activity resulted from many
factors, almost too many to count, with weather bringing the last punch.

Nevertheless, homes priced $2 million and higher experienced
relatively larger year-over-year declines in sales activity, while homes priced
below $1 million finally reversed the double-digit declines that characterized
2018, declining at the slowest rate compared to higher-priced sales.
Improvement in sales of homes priced below $1 million was helped by
year-over-year increases in sales in San Mateo and Santa Clara – the first
annual increase after at least 26 months of declines which sometimes reached as
much as 40 to 60 percent. Table 1 summarizes changes in the number of sales by
region compared to last year’s first quarter.

Table 1

Source: Source: Terradatum, Inc. from data provided by local MLSes, April 7, 2019

While higher-priced sales did experience a relatively larger drop off in activity compared to 2018, higher-priced sales still trend above 2017 levels and the years prior. Last year saw a surge in sales of homes priced above $2 million. Figure 1 illustrates monthly sales activity by price range, the black line highlighting sales priced at $2 million and above. Note that sales activity nearly doubled between the summer of 2017 and 2018, peaking in May 2018. As Table 1 suggests, most all regions except Alameda saw fewer sales above $2 million than last year. Count-wise, declines were mostly driven by Santa Clara and San Mateo.

San Mateo and Santa Clara did see a jump in sales of homes
priced below $1 million, both up 8 percent, which may suggest buyers are
responding to anticipated IPO impacts. However, these were also the areas with a
robust buildup in for-sale inventory of homes priced below $1 million starting
in fall of last year. Thus, availability of the inventory may have pulled in
buyers who have been desperately waiting for more affordably priced homes.

Figure 1: Number of monthly home sales in the Bay Area, by price range

Source: Source: Terradatum, Inc. from data provided by local MLSes, April 7, 2019

Sellers also seem to be also responding to Lyft and Uber and
potentially other IPO filings. For example, while Santa Clara averaged 30
percent more inventory in the first quarter, San Mateo sellers tested out the
market between November and January, driving inventory up an average of 21
percent above last year, then driving inventory down 10 percent again in March.

San Francisco sellers responded the same way. After the
first annual increases in 25 months between October and December, inventory
declined again by 32 percent year-over-year in February and March – the largest
declines across the region seen among homes priced below $1 million. However,
San Francisco sellers of all price ranges decided to hold off on listing their
homes, whereas there were more sellers of higher-priced homes across all other
Bay Area regions. 

To illustrate San Francisco sellers’ response, Figure 2 tracks monthly year-over-year changes in for-sale home inventory in San Francisco overall, San Francisco inventory below $1 million, and overall Bay Area without San Francisco. The black line is highlighting the relative drop in San Francisco inventories below $1 million in the last two months, after a short three-month increase during the winter months. 

Figure 2: Year-over-year change in for-sale inventory

Source: Source: Terradatum, Inc. from data provided by local MLSes, April 7, 2019

Table 2 summarizes March’s year-over-year change in
inventories across all Bay Area communities. Fortunately for Bay Area home
buyers, inventory options have generally improved compared to last year. In
addition, inventory of homes priced below $1 million has improved, driven by
jumps in Alameda and Santa Clara. 

Table 2

Source: Source: Terradatum, Inc. from data provided by local MLSes, April 7, 2019

While anticipations are running high on how Lyft and Uber
IPOs may affect Bay Area housing markets, particularly San Francisco, median
home prices remain below last spring’s high. Note that beginning in fall 2017,
median home price growth started accelerating at double digit rates, reaching
as much as 18 percent year-over-year growth in March. Median prices peaked in
May 2018. Price growth has moderated since then, and more recently fell below
last year’s levels. However, as noted above, the share of higher-priced sales
also declined since last summer peaks, thus more lower-priced sales are
affecting the mix of sales and lower year-over-year rates. Figure 3 illustrates
median price trend in San Francisco and the Bay Area overall. While a seasonal
increase in home prices from January lows is evident across the Bay Area
region, San Francisco and Marin (not in chart) experienced a relatively higher
jump than in other areas, with San Francisco jumping 16 percent, Marin 21
percent, and the overall Bay Area 12 percent. Still, none of these suggest any
trends as seasonal jumps of that magnitude have been historically consistent.

Table 3 summarizes March median home prices, year-over-year
change, and first quarter change. Most notable declines remain in Santa Clara
and Sonoma, both of which saw a rather significant run up in prices in early
2018. In both regions, prices are back to where they were before the 2018 run
up.

Table 3

Source: Source: Terradatum, Inc. from data provided by local MLSes, April 7, 2019

Figure 3: Median Home Prices

Source: Source: Terradatum, Inc. from data provided by local MLSes, April 7, 2019

In summary, it will be an interesting year ahead for Bay
Area housing markets. While much of Lyft and Uber IPO monies will be
constrained by employees’ lock-up periods in the coming months, housing markets
certainly have all the characteristics of a potentially robust home-buying
season — more inventories, lower mortgage interest rates than last spring,
motivated buyers and sellers, and more IPOs in the pipeline. Stay tuned!

Compass Northern California Quarterly Report: Q1 2019

Chief Economist Selma Hepp offers a brief synopsis of first-quarter real estate activity in each of Compass’ Northern California regions. The accompanying links lead to the full report for each area, where you can access the latest regional and community-specific market data and statistics to help you make a better, more informed home-buying or selling decision.

Q1 2019 Regional Summaries

Contra Costa County

Similar to the Bay Area overall, home
buyers in Contra Costa County in the first quarter of 2019 generally showed
restraint, bringing home sales activity below levels seen in the same period
last year. While sales mostly slowed across all price ranges, buyers of homes
priced between $2 million and $3 million maintained their momentum keeping
sales activity on par with last year. This price range has been popular in
Contra Costa over the last year.

At the same time, available inventory
continued to improve across all price ranges with an overall increase of about
12 percent and all price ranges positing 10-plus percent increases. Buyers of
homes priced between $2 million and $3 million saw the largest increase in
options compared with last year. 

Despite more inventory, buyers remained
reluctant and unwilling to engage in bidding wars or pay more than the asking
price. Price reductions, while fewer than during the winter months, still
remained elevated compared to last year with 2 in 10 homes selling below listed
price. The median sales price perked up about 2 percent compared to last year’s
first quarter.

Looking Forward: With the arrival of spring, many home buying conditions improved, including lower mortgage rates, more inventory, and realigned seller expectations – all of which should signal opportunities for home buyers in coming months and are reflected in increased buyer interest.  

Click here to read the full Q1 2019 Contra Costa County real estate report.


East Bay

While East Bay housing market activity in the first quarter showed
similar restrain as most of the other Bay Area markets, buyer demand of homes
priced above $2 million remained strong and notably above last year’s first
quarter activity. Most of the slowdown in sales came from homes priced between
$1 million and $2 million, which could be a result of detrimental impact of the
tax reform among the buyer group which may be more sensitive to lower home
deductions.

 Buyers in the East Bay also saw continued
improvement in inventory among all price ranges, with largest increases again
among homes priced between $1 million and $2 million. Buyers continued to take
longer to decide on buying homes leading to longer time on market and more
price reductions compared to the same period last year. With affordability as a
main concern for some buyers, homes priced below $1 million saw relatively more
price reductions than higher priced homes. As a result, the pressure on median
home price growth continued to ease.  

Looking Forward:  Following a difficult quarter, spring has brought improved home buying conditions, including lower mortgage rates, more inventory, and realigned seller expectations – all of which signal opportunities for home buyers and are reflected in improved home buying sentiment.

Click here to read the full Q1 2019 East Bay real estate report.


Marin County

Sausalito, California, Residential Building, Residential District, Restaurant

As in most of the Bay Area, first quarter housing market activity in
Marin remained challenging, leading to fewer overall sales compared to last year.
However, most of the decline in sales came from homes priced above $3 million,
while lower priced homes fared relatively better than in most of the other Bay
Area regions.

Meanwhile, the inventory of homes for sale continued to increase compared
to a year ago, albeit at a lower pace than in some other regions. Homes priced
above $3 million saw a relatively larger increase in inventory than lower
priced homes.

Buyers remain trepid amid the economic and political uncertainties that
characterized the first quarter, taking longer to make a decision and seeking
price reductions. However, while the price reductions are elevated compared to
the year before, they have declined since winter peaks. Most of the homes sold
below asking price were higher priced homes. As a result, median price growth
stalled in the first quarter.

Looking Forward:  Following a challenging beginning to the year, spring home buying season offers improved opportunities for buyers, including lower mortgage rates, more inventory, and improved balance between buyers and sellers already leading to more optimistic buyer sentiment than in recent months.

Click here to read the full Q1 2019 Marin County real estate report.


Napa County

Napa’s first quarter housing market faced challenges including continued
slowing of overall home buyer demand and rainy winter conditions, leading to
fewer homes sold compared to last year’s first quarter. While fewer homes were
sold across price ranges, sellers of homes priced between $1 million and $2
million faced relatively more resistance from buyers, while buyers of homes
priced below $1 million demanded more discounts. 

Availability of for-sale inventory continued to improve in the first
quarter with buyers across most price ranges having more options than in the
last year. Buyers, however, remained reluctant, taking much longer to make a
decision than in the last couple of years.

Although buyer reluctance led to fewer bidding wars over the last two
quarters, the last couple of months showed some rebound in buyer competition
with more homes selling over asking price than during the winter lows. Still,
notably more homes sold below asking price than last year. Home price growth,
while weakening in the first quarter, picked up again as March rolled around.

Looking Forward: With improved home buying conditions in recent months, not least of which are lower mortgage rates and slower price growth, home-buyingdemand should pick up. Napa County’s relative affordability make it especially attractive to Bay Area buyers.

Click here to read the full Q1 2019 Napa County real estate report.


San Francisco

San Francisco’s slowing housing market activity which started in the
fourth quarter 2018, continued to trend lower in the first quarter leading to
fewer units sold across all price ranges. 
Homes priced between $2 million and $3 million saw a relatively larger
decline on a year-ago basis which was the case in most Bay Area regions.

Despite slight improvements, for-sale inventory remained a challenge and
buyers continued to face limited options. However, buyers remained relatively
more enthusiastic than elsewhere in the Bay Area, with buyers of both
single-family homes and condominiums more likely to absorb the newly available
inventory and homes more likely to sell over the asking price than not. Six in
ten homes continued to sell above asking price with the average premium keeping
relatively steady at 13 percent. As a result, San Francisco did not see an
increase in price reductions compared to last year’s first quarter, unlike many
other regions in the Bay Area.  

Looking Forward: San Francisco homebuyers remain determined, helped by improved home buying conditions, better financial markets, lower rates and possibly increased competition from newly minted IPO beneficiaries.

Click here to read the full Q1 2019 San Francisco single-family homes real estate report.

Click here to read the full Q1 2019 San Francisco condominiums real estate report.


Mid-Peninsula

Following the overall slowing of housing market activity in the Mid-Peninsula
in the later part of 2018, first quarter finished with a continued decline in
total number of homes sold, except for a jump in sales of homes priced below $1
million. At 5 percent fewer sales in the Mid-Peninsula in the first quarter, this
decline is relatively smaller than in adjacent San Francisco and Silicon Valley
where declines averaged over 10 percent.

For-sale inventory continued to improve, mostly among homes priced above
$1 million while fewer and fewer lower priced homes were available for sale.

Buyers remained restrained and fewer homes sold over asking price
compared to the first quarters of previous years. However, recent months have
shown some renewed enthusiasm leading to a pick up in buyer activity and
bidding wars. Overall, 6 in 10 homes continued to sell over asking price. In
addition, slowing of median price growth, which started in the second half of
2018, reversed some in March, showing a positive increase year-over-year.

Looking Forward: With the arrival of spring, many home buying conditions improved, including lower mortgage rates, more inventory, rebound in financial markets and realigned seller expectations – all of which should signal more opportunities for home buyers and a stronger housing market in the coming months.

Click here to read the full Q1 2019 Mid-Peninsula real estate report.


Silicon Valley

Silicon Valley continued to see
relatively muted housing market activity in the first quarter, especially when
compared to last year’s uncharacteristically dynamic conditions. Nevertheless,
while total number of homes sold declined, winter’s build-up in affordably
priced inventories in Santa Clara County helped push sales of those homes above
last year’s levels. Largest decline in home sales activity was among homes
priced above $3 million.

At the same time, while Silicon
Valley continued with inventory decreases, the remainder of Santa Clara County experienced
relatively larger increases in the number of homes for sale compared to other
Bay Area regions, and the increases were widespread across price ranges.

Buyers remained restrained and less
likely to engage in bidding wars than in previous years. However, improved home
buying conditions and lower mortgage rates brought back some enthusiasm leading
to a bounce back in the share of homes selling over asking price. About 50
percent of homes sold over asking price at the end of the quarter.

Declines in sales of higher priced
homes, coupled with buyer restraint, led to a decline in median home prices on
a year-over-year basis. However, median prices are still in line with levels
prior to last year’s extraordinary jump in prices, averaging almost 30 percent
at times.

Looking Forward: With improvement in buying conditions such as lower mortgage rates, more inventory, lower median prices, buyers are facing great opportunities this spring. Renewed interest is also evident in improved home buyer sentiment in March.

Click here to read the full Q1 2019 Silicon Valley real estate report.


Sonoma County

While the spirit of rebuilding continued in Sonoma County in the first
quarter, housing market activity remained affected by similar buyer restraint as
in other Bay Area regions. Sales activity continued to trend below last year’s
levels, though the largest relative declines were among higher priced homes,
especially those priced above $3 million which showed virtually no sales in the
first quarter.

Meanwhile, following strong increases in for-sale inventories during the
winter months, sellers took a step back, leading to much smaller increases in
inventories on an annual basis, especially among homes priced below $1 million.
Overall, inventory is still higher than last year.

Post-fire bidding wars and rapid price growth continued to wane, and
together with restrained buyers, led to lower prices than March 2018. Median
prices are now back to levels seen in October 2017, prior to the wildfires.
Sellers also adjusted their expectations and homes were priced at levels
aligned with buyer’s willingness to pay, resulting in fewer overall price
reductions than during the winter months.

Looking Forward: The extreme rains that have been pelting Sonoma County are beginning to slow, and an increase of sunny skies should kick off a delayed buying season. Another wildcard for Sonoma County might be that many fire survivors will running out of the two years of Like-Kind housing provided by insurance companies. That will likely force the decision to build, buy or move on. Since the cost of building has risen substantially, primarily due to the price of both materials and labor, many survivors may be coming into the market for comparable existing home options.

Click here to read the full Q1 2019 Sonoma County real estate report.


Sonoma Valley

Housing market activity in the first quarter in Sonoma Valley continued
at a slower pace, resulting in fewer homes sold compared to last year’s first
quarter. Slower sales activity reflected a similar sentiment seen across the
region. However, unlike the rest of Sonoma County or other Bay Area regions, Sonoma Valley did not see an uptick in listing
inventory. The persistent rains this winter and spring
seem to have kept sellers from bringing their properties to market. One good sign is that open house activity has
been strong despite the rain, indicating that buyers’ intent doesn’t appear to
have been dampened by the weather. 

Buyer restraint continued to hold back demand for homes resulting in more
price reductions and lower sales price than the original asking price. Median
prices, while slightly lower than in the first quarter last year, returned to
levels seen prior to wildfires, which led to remarkable price growth in first
half of last year. 

Looking Forward: Sonoma Valley remains a favorable market for buyers, both for primary homebuyers and second-home buyers due to its proximity to San Francisco and other Bay Area job centers. With improved buying conditions, such as lower rates, lower home prices, and reduced financial market volatility, home buyers once again have a great opportunity to buy in Sonoma Valley.

Click here to read the full Q1 2019 Sonoma Valley real estate report.


Lake Tahoe/Truckee

Much like in the Bay Area, first quarter housing market activity in the Lake
Tahoe region continued to slow compared to last year’s first quarter. Decline
was relatively more notable in March compared to the previous two months,
likely due to a spike in sales activity in Lake Tahoe last March as well as relatively
snowier conditions this winter.  

For-sale inventory showed improvement, with an increase among both
single-family and condominiums. Buyers, however, remained restrained and took
longer to make a decision, leading to more price reductions and lower sales to
original asking price ratios than in recent quarters.

Looking Forward: Home buying conditions have recently improved, including lower mortgage rates and more inventory, once again spiking consumer home buying sentiment. Upcoming Bay Area IPOs should also bring some enthusiasm to Lake Tahoe housing markets.

Click here to read the full Q1 2019 Lake Tahoe/Truckee single-family homes real estate report.

Click here to read the full Q1 2019 Lake Tahoe/Truckee condominiums real estate report.

Editor’s note: This report reflects the Northern California areas in which the company formerly known as Pacific Union operates.

Home of the Week: San Marino treasure, on market first time in 57 years

The epitome of Spanish Colonial Revival elegance, the Filley Residence has had just two owners since its completion in 1927 – both dedicated to sensitively preserving and enhancing its beauty.

Set in a coveted estate area of San Marino at 626 Chaucer Road, the home by noted architect Harold Bissner retains a wealth of original architectural details. They include colorful period tile, hardwood floors, period wrought iron details and light fixtures, built-in cabinets, decorative arches and a hand-crafted tile roof.

The gracious entry and dining room are floored in terra cotta.

The large living room has a hand-hewn beamed ceiling and French doors opening onto a covered patio overlooking formal gardens with boxwood hedges, roses and fountains.

A paneled den, powder room, kitchen, breakfast room and guest suite complete the ground floor.

Upstairs, the generous master suite is highlighted by a welcoming fireplace and a spacious, sunny balcony with exhilarating views of the mountains. Two additional bedrooms share a full bath.

The large, level lot, enhanced by mature trees and plantings, includes a three-car garage. Harold Bissner’s impeccable vision can still be seen in upscale residences and refined buildings throughout the San Marino/Pasadena area.

This is a unique opportunity to own a property created with exceptional craftsmanship and timeless romance. The home is listed by LeAnn Healy at $2,670,000.

Commercial division’s top producers launch Partners CRE


Introducing Partners CRE, a new Compass Commercial real estate team.

On the heels of Compass Commercial LA hosting its inaugural annual awards to celebrate the division’s top producers, three of its award winners—Top Producer Dario Svidler, Platinum Producer Shaya Braverman and Gold Producer Morgan McMullin—joined forces to form Partners CRE at Compass. Established as a collective, Partners CRE will be headquartered in Compass’ Beverly Hills office on Rodeo Drive and also features senior associate Zach Krasman and junior members Patrick Barakat, Tai Kagehiro and Justin Ruder. They are supported by staff members Robert Fitzgerald (operations), Peter Svidler (operations) and Robert Gutierrez (marketing).

358 Douglas Street | Offered at $12,495,000 by Partners CRE

The collaborative team comes together with a vision of working closely with clients in comprehensive commercial deals to build and fulfill strategic real estate investment plans. Partners CRE offers a full spectrum of value-added services, from market research to ongoing advisory services and deals with all commercial property types including multi-family, office, retail, industrial, land and development investments and 1031 exchanges. They also have succeeded in disposing of distressed assets and realizing gains. Their range of first time mom and pop buyers to large institutional investors keep clients coming back so as to maintain profitable relationships for years.

5979 W 3rd St. | Sold at $7,750,000 by Partners CRE

Dario Svidler, who is also Executive Vice President for Compass Commercial in Southern California, shared, “Commercial real estate is a competitive, cutthroat business with lots of ups and downs. But, coming together to create Partners CRE at Compass has allowed us to be more collaborative, leading to greater success not just for ourselves but also for our clients. It’s likewise a true joy to work with friends.”

“We’ve all had very successful individual careers in commercial real estate but find that each of us adds a different element of specialty, which has allowed us to deliver to our clients a more well rounded professional service and bring in more business,” shared Morgan McMullin, Senior Vice President Compass Commercial Southern California.

8301 Santa Monica Blvd | Offered at $13,000,000 by Partners CRE

“Knowing Dario and Morgan throughout different aspects of my professional and personal worlds, I realized the strengths we each have. Capitalizing on our specifics combined with our personal respect for one another and bond has allowed ourselves to continuously grow and our clients to achieve the best results,” says Shaya Braverman, Vice President Compass Commercial Southern California.


Recent closings under Partners CRE collective include:

11661 Erwin St., North Hollywood – 18 Units

1825 N New Hampshire., Los Feliz – Land

8828 Memory Park Ave., North Hills – 26 Units

410 N Hayworth, Los Angeles – 14 units

1221 S Meyler St., San Pedro – 7 Units

Dunn/Regent, Palms – Land

1634 Arapahoe St., Los Angeles – 9 Units

631 Navy St., Santa Monica – 4 Units

5979 W 3rd St. Los Angeles – Coffee Bean/Mixed-Use

Together, the team has already grossed $30,000,000 in sales year to date.

Jobs Report suggests continued strength in employment, alleviating fears of looming recession


economic-straight-talk

Today’s much anticipated
national employment report from the U.S. Bureau of Labor Statistics
provided further evidence of continued solid economic
growth. There were 196,000 jobs added in March, after a wild swing between
January’s 312,000 additions and February’s 33,000 additions. The
three-month average is now 180,000 in the first quarter, which was above economists’
expectations and still robust considering the low unemployment rate of 3.8
percent. The unemployment rate remained unchanged in March.

It’s important to note, in a trend since 2010, generally
one of the first quarter months has seen distortions in seasonal estimations of
payroll data. This has been attributed to variation in the timing
of winter storms and holidays, but also the 2.3 million drop in payrolls in
Q1-2009 — the largest drop in a single quarter since 1945 — may have also
disrupted the seasonal adjustment process for the first quarter jobs data.

The economy has added jobs for 102 straight months, the
longest continuous stretch in recorded history. Going forward into the year,
economists expect the hiring to continue, albeit at a slower pace as a tighter
labor market makes it more difficult for employers to find available workers. According
to NABE’s Business Conditions Survey, about 53 percent of businesses are
reporting skilled labor shortage, with the rate on a continual increase since
the economic expansion began. Also, the fueling impact of tax cuts has began to
fade and will contribute progressively less to job growth.

Furthermore, the labor force participation rate fell
slightly to 63.0 percent, from 63.2 percent the month before, which means
roughly 224,000 fewer available workers — most likely due to retiring Baby
Boomers.

While health care and social assistance, professional and
business services, and leisure and hospitality gained the largest number of
jobs in March, manufacturing posted a decline of 6,000 jobs with most all of
them in the motor vehicle and parts sectors — a sign of slower economy abroad
and trade headwinds. Retail trade and temporary help services also posted
declines, possibly a reflection of weakened consumer demand seen in the retail
sales report issued earlier in the week. 

Wage growth rose only slightly, 0.1 percent, rounding the
annual growth to 3.2 percent in March. Still, current wage growth, which
notably picked up pace in 2018, is now the highest growth rate since 2009.
Also, wage growth is currently strongest in low-wage industries, with the pace
of nonsupervisory employees outpacing wages in professional and business
services since October 2018.  

Today’s report should be a booster to investors and those
dreadfully looking for signs of recession. Another positive sign, very
different from the previous two pre-recession periods, is the increasing job
openings trend (see Figure 1). According to the U.S.
Bureau of Labor Statistics Job Opening Labor
Turnover Survey
released earlier this month, job openings increased
again from the month before, reaching 7.58 million at the end of January. Job
opening rate also increased slightly to 4.8 percent, up from 4.7 percent the
month before.  

Lastly, according to today’s CompTIA
report
, the U.S. tech sector added 16,000 new jobs in March, its
strongest month for hiring so far this year. The unemployment rate for IT
occupations was 1.9 percent in March. Looking ahead, employers increased the
number of job postings for core IT positions by an estimated 62,433 in March
over February, with software and application developers in highest demand.

Figure 1


Taken together, the series of job releases suggests continued strength in employment and an optimistic outlook among U.S. organizations, which should help alleviate fears of looming recession and the negative rhetoric loop which can be a dangerous self-fulfilling prophesy. Still, Federal Reserve is expected to remain “patient” and possibly restrain from any further rate increases in 2018.