The real estate blog.

November saw a slowdown in job growth for Utah where a trend is now developing. Job growth in the state has slowed since August of this year, when the subprime mortgage mess blew up on Wall Street and banks and lenders started hoarding cash.

Utah’s homebuilders are slowing down, but commercial builders, including government projects, are increasing their payrolls.

Builders along the Wasatch Front took out 382 permits for the construction of new homes in November, down from 1,048 in November 2006 and the lowest total since 1990.

Construction industry employment is up 8.7 percent over last year, with commercial construction more than compensating for a downturn in residential construction, Knold said.

Financial activities employment - a category that includes mortgage and title company personnel, and real estate brokerage employees - is up 5.2 percent over last year.

Utah’s job growth rate and unemployment rate are in the tops of the country now, but it’s clear the effects of the credit crunch will have far reaching consequences. We also have to consider that should our troops come home next year, that will add nearly 100,000 people back into the job market across the country. There are currently about 330,000 unemployed Americans.

The Fed has been working to ease the credit crunch by supplying additional capital through auctions for banks in need of funds. Today the Federal Reserve announced $20 billion in loans were made from Monday’s auction. The rate is 4.65%, 10 basis points less than the rate charged by the Fed’s discount window where banks can borrow directly from the institution.

Wall Street’s mood seems to have improved a bit as well. Sam Zell, the billionaire real estate investor, said a few months ago the true problem with the credit crunch isn’t a liquidity problem, it’s a confidence problem. Pat Kitano at TransparentRE is finding this to be true. He culled a great quote from the Financial Times -

But down on the trading floors and in the treasury departments of financial services groups, a subtle psychological shift is under way: as the shock of the summer’s events starts to fade, traders, investors and issuers are starting to adapt to the idea that the cost of borrowing has changed. As a result, activity in debt markets is picking up again. Or as Ben Bennett, an analyst at Lehman Brothers, says: “The credit machine is slowly restarting.”

Until the reactions from the Fed and Congress are fully executed, we’re all in a wait and see mode. Hopefully the job situation in Utah will continue to be strong and the fallout from the real estate downturn will remain as it is.