Layoffs are just as common in big-tech these days as they are in the mortgage industry. But some economists say layoffs at companies like Amazon, Twitter and Meta could negatively impact the housing industry.
The Hill reports these layoffs could force sales, damage buyer confidence and prompt smaller down payments, even from still-employed buyers. Some tech layoffs are numbered in the tens of thousands. All this adds up to added pressure on local housing markets.
“The housing market is fueled by confidence, affordability, and most importantly, jobs. Housing demand in tech-heavy metros is expected to be lower in the near-term,” Ali Wolf, chief economist at Zonda, told The Hill.
High interest rates are still halting sales. Nearly 60,000 deals fell through in October. Silicon Valley cities like San Francisco and San Jose saw high home sale cancellations last month — 6% and 8% of sales fell through respectively.
“At a high level, there’s reason to suspect tech layoffs will put some downward pressure on prices in both the for-sale and rental markets,” Rob Warnock, a senior research associate with Apartment List, told The Hill.