Cutbacks Mount in Real Estate Industry

The first jobs affected by the downturn were in residential construction. Though some residential builders have been able to transfer their skills to the office space and other commercial projects, losses are starting to show up in employment data.

Preliminary data project construction employment in Northern Virginia, for example, to fall slightly in July after gains each month over the past year, said William F. Mezger, chief economist at the Virginia Employment Commission.

Overall real estate employment, which includes agents, inspectors and building managers, remains stable, though the data were collected before the recent turmoil in the mortgage markets.

Other indicators portend prolonged woes in employment related to real estate. The number of construction permits in the Washington region is projected to be about 24,000, down more than one-third from 38,000 in 2005, according to Moody's Economy.com.

"I see the next year as being very slow, so I'm conserving cash for the future," said Roy Kilby, co-owner of K&P Builders in Bowie, the Prince George's firm that reduced its staff.

Economists at Lehman Brothers said in a report last week that a pullback in mortgage lending would prolong the U.S. housing recession and trigger job losses in the real estate, construction and mortgage industries. Home sales and construction starts will continue to decline through the middle of 2008, and national home prices will fall "modestly," said the authors of the report, Michelle Meyer and Ethan Harris. Their conclusion: "The housing recession looks far from over."

By the time job losses show up in state and Bureau of Labor Statistics data, the strain will have long been felt on workers and businesses.

Gerardo Avila, 35, comes each morning to a site in south Arlington where day laborers gather. He has long seen a decline in the number of contractors and remodelers who come by to find workers. Two years ago, summer days were busy, and he was almost guaranteed a job. But at noon on a recent day, the site was teeming with day laborers unable to find work.

"It's been like this many days," Avila said.

Kilby, a member of the fourth generation in his family to work in the building industry, has cut prices on his homes in subdivisions of Prince George's and Charles counties. The new homes are built with luxury finishes like granite countertops, crown molding and large spa tubs -- the kinds of bells and whistles people were demanding when credit was easy to come by and his sales offices were full of prospective buyers. Now that it's become harder for home buyers to obtain loans, he's stuck with expensive houses on expensive lots that he is struggling to sell.

"We're doing just about anything we can do to get people into a house, said Kilby, a 50-year veteran of the home-building business. "And these are people we would have told to take a hike last year or the year before last."

Slower sales and lower prices have translated into smaller budgets for salaries. From a staff of 17, Kilby has cut a carpenter, a project superintendent, a building laborer and a punch-out clerk.

While construction jobs have been the most visibly affected, workers in related industries are dusting off their r�sum�s as the global credit crunch scrambles the employment picture.

Capital One said it would close its mortgage banking unit, GreenPoint, which has 31 locations in 19 states, including one in Silver Spring that employs about 28 people and another in Baltimore with 29 workers.

Those losses have created opportunities for others.

Bank of America's mortgage lending office in Annandale is trying to hire more lending agents, targeting seasoned veterans laid off from troubled competitors.

"There's still a lot of money out there to lend and people who want those loans so my phone has been ringing off the hook since the other shops closed down," said Rick Eul, assistant vice president of the Annandale office. "We're picking the top dogs out of those offices."

Staff writer Nancy Trejos contributed to this report.