High-Income Job Losses Reshape Local Investment Playbooks
An employment analysis by John Burns Research & Consulting, using year-over-year metrics through August, underscores a profound employment shift rippling through major U.S. metros. The contraction or stagnation of high-income sectors—including information, professional and business services and financial activities—is particularly acute in key markets, transforming the supply-and-demand calculus for commercial and residential real estate.
In New York, Los Angeles, San Francisco, Chicago and the Bay Area, the historic growth engines tied to tech, finance and professional services have shifted into reverse. San Francisco and the East Bay are seeing especially pronounced shrinkage in tech-adjacent and financial roles, with PBS and Info leading the decline.
New York’s employment malaise cuts through multiple sectors, compounded by similar red flags in construction and high-income jobs. In Boston, widespread weakness in high-income and white-collar categories mirrors the coastal narrative, reinforcing a bearish undertone for luxury rentals and Class A for-sale units.
On the other hand, some metros are bucking the contraction in the high-income sector by leaning on services and government employment. Miami, Jacksonville and Salt Lake City, for example, exhibit green shoots in Leisure & Hospitality and Government roles—even as their construction and finance sectors slow.
Houston’s data is more mixed: although total employment is supported somewhat by government and consumer sectors, contraction in construction and finance undercuts broader growth. In San Antonio, gains in government and leisure jobs provide a partial offset to slowing construction activity. In Raleigh-Durham and Charlotte, education and healthcare employment are outpacing historical averages, bolstering rental market fundamentals while dampening for-sale momentum.
Across the Midwest and Sun Belt, metros like Indianapolis, Orlando and Phoenix show sectoral resilience by posting gains in education and healthcare. Atlanta, however, shows contraction not just in high-income roles but also in construction, reflecting broader weakness spanning both the for-sale housing supply chain and the white-collar demand base.
Throughout the West, Seattle, Denver, Riverside-San Bernardino and Las Vegas show sectoral cooling across high-income, construction, and information roles, signaling broad-based moderation of job growth and dampening multifamily and single-family absorption prospects.
Education and healthcare emerge as the lone highlights nearly everywhere, with year-over-year gains outpacing their long-term averages (up 3.3% against a CAGR of 2.1%). These “rentership” sectors are providing the most consistent fuel for new household formation in rental properties, a point especially evident in metros with multifamily-heavy construction pipelines such as Miami, Dallas, and Nashville, according to John Burns.
The construction sector is broadly slowing or shrinking across the entire dataset—an early warning for supply-side constraints and an additional risk factor for developers weighing entry or expansion in the late-cycle environment.
Meta-trends are clear: Most metros are adding jobs at a slower pace than their long-term trend and many are losing ground in the high-income categories that, for a decade, drove for-sale housing above rental.
As the employment recovery and sector composition tilt in new directions, investors will be forced to recalibrate their strategy market by market. Any sustained recovery in for-sale housing or a new wave of CRE development will be uneven, dictated far more by local sector trajectories than by headline national figures.
Source: GlobeSt/ALM