Careers During Economic Downturn

lf3871's picture
Rank: Monkey | banana points 30

Assuming a recession is coming in the next decade or so, which careers in real estate are the most vulnerable? I'll be entering the real world in the next few years and this might influence my career decisions coming out of undergrad

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Comments (12)

Funniest
Jan 11, 2019

Brokerage is the most stable by far. Residential brokerage is where you should be if you are seeking stability, especially if your speciality is luxury homes.

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Most Helpful
Jan 11, 2019
lf3871:

Assuming a recession is coming in the next decade or so, which careers in real estate are the most vulnerable? I'll be entering the real world in the next few years and this might influence my career decisions coming out of undergrad

It might, but it shouldn't until it has to. Do what you want to do. You can't time the market.

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Jan 11, 2019

You should be safe at the junior level no matter where you go. The expensive middle management is typically where the major layoffs occur.

Jan 13, 2019

Not sure why you got MS, seems like a reasonable question and I wish I had asked it before I went into brokerage straight out of college. Asset management is considered more stable than acquisitions, which is more stable than development, which is more stable than brokerage. I work in LIHTC which seems resistant to some elements of a recession due to increasing and constant demand due largely, in my opinion, to the general squeeze on standard of living by from asset inflation in first tier American cities. That's my two cents.

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Jan 15, 2019

Back in 2009 I had a land listing fully entitled for about 150 apartments in a desert community in CA. I put it in escrow with a well known LIHTC builder. They couldn't get any credits, lol. Deal fell out. Granted, this was in Beaumont, Ca versus a larger city, but still, anything can happen and I don't expect 2009 to ever be upon us again.

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Jan 15, 2019

There is a limited supply of credits. That coupled with the fact that major banks are effectively forced to invest makes the industry stable.

Jan 15, 2019

I agree with the ranking that @Danielplainview has of risk as far as potential employers in real estate. From a risk perspective, asset management seems like the place to be. The risk to that is potentially getting pigeonholed as an asset management person through the rest of your career - it doesn't generally pay as well as positions in acquisition, development, or brokerage.

The exception to this ranking is if you can go work for a well-capitalized family office. Those jobs are pretty sweet, though, and very difficult to get. If you get one, though, no matter what department you're in they will probably keep you on through a recession in order to avoid having to hire a new person on the other side of the recession.

IMHO we're within two years from a recession, based on the yield curve. Could be wrong, but the yield curve has been a leading indicator for quite some time.

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Jan 14, 2019

Best place during a recession? A well-capitalized distressed buyer.

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

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Jan 14, 2019

Downturns are moments of opportunity. Many of the largest real estate fortunes are built during tough times, when the market is spooked and people walk away from solid deals at low basis.

To invert this idea, consider this: The market is hot right now, and in my market people are investing heavily in new and existing Class A apartments even though we are witnessing flat or negative rent growth. I have a lots of friends in investment and development who are churning through deals that have zero chance of performing better than average. It's just where we are in the cycle. They need to do deals to put food on the table, but none of them are going to hit a home run on a new project that gets capitalized at this moment.

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Jan 15, 2019

The reality is that most any career can, and will be, impacted by an economic downturn. What you should focus on is making sure that you have marketable, solid skills and that you financially prepare for it. Since you are in school, that means basically crushing your classes so that you have a top end GPA to market when you come out.

I have some good news for you - as a student coming out you can position yourself as a high potential, low cost employee in whatever industry you want - real estate included. That doesn't mean it will be easy, however, it does give you some advantages compared to someone who has a family, makes a decent chunk of money and may or may not be one of the first to get chopped unless they are a massive, massive producer.

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Jan 15, 2019

Correct. Public Works projects were considered to never end...then they did for over a year in SoCal. There were some, but not many. Even cities weren't spending money. Saw a 70 year old company go south. The owner was a client of mine.

Jan 16, 2019