Industry Research
Seven years ago in the Antelope Valley, there was vast areas of opened desert with hundreds of Joshua trees. Just in the past four years, there began to be a large number of people buying homes which began a demand for new homes to be built. Down the street from where I live, there was an open desert land and now there is 30 to 40 new homes built there.
Many houses were being built in an attempt to keep up with the growing number of people who were buying houses. In order for the houses to be built, builders had to hire workers to build the houses. As demand for housing rose, so did the house price. Houses which were being purchased for $150,000, is now costing $300,000 and the cost is still rising. When the economy was steady, house sales was one of the profitable businesses in the Antelope Valley.
As the real estate and mortgage industries started to drop, less and less houses are being built. There is less demand for new housing and less demand for workers to build houses. Construction have began to cut back on their workforces; not just the construction workers, but sales teams, administrative staff, painters, carpenters, etc. The effect on the equilibrium of the labor market has shifted, which has an effect on other industries, as well. People are losing their jobs, especially in the real estate and construction industries.
Due to the real estate tumbling, these workers have to find work in other industries. Additionally, it affects the economy as a whole because if people are out of work, they have less money to spend on food, gas and other necessities. This means decreased sales for other industries.
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