These Five Job Markets Have Fully Recovered From COVID-19

Salt Lake City is the strongest employment market since the onset of the pandemic and now employs 45,000 more people than before COVID-19, a 3.4% gain.

Other markets that are outperforming national employment figures include Austin, which lost 142,000 jobs during the pandemic and has 24,000 more than before;  Jacksonville, which  lost 82,000 jobs and has 8,000 more jobs than February of last year; Tampa, which lost 172,000 positions and now has 12,000 more jobs; and Phoenix, which has 14,000 more jobs than before the pandemic.

These metros offer investors “a chance to ride a wave of growth,” says John Chang, Senior Vice President and Director, Research Service at Marcus & Millichap. The CRE markets in these cities have mostly already recovered and have been posting strong growth in terms of space demand and pricing.

The US added 5.8 million jobs through October after losing 22.4 million jobs at the outset of the pandemic, and has recovered a total of 18.2 positions, an 80% recovery.

Total US employment still remains 2.8% below pre-pandemic levels, however. “The jobs recovery has definitely been uneven, varying significantly by metro,” Chang says. Five metros have fully recovered, but numerous markets still lag the national average. But “whether a city is ahead or behind of the employment curve has a meaningful impact on short term CRE performance—but there are opportunities at both ends of the spectrum.”

Metros that are still trying to ramp up employment tend to be large metros that had rigid COVID protocols, as are cities with an “outsize” reliance on tourism, he says.

The metro furthest behind the curve/? New York City, which lost 960,000 jobs to the pandemic and is still 10.1% below pre-COVID employment levels. The city has added 16,000 jobs per month over the last six months.

Next in line is Las Vegas, which is down 7.5% over pre-COVID employment levels. Sin City has, however, recovered 82% of the 280,000 jobs it lost due to COVID and is adding back 8,000 jobs per month.

Los Angeles is 7.4% below pre-pandemic levels, and has recovered 56% of the positions lost. The city is adding 25,000 jobs each month. Orlando follows as the market with the fourth most ground to recover, then the Bay Area.

But “with vaccines in place and government restrictions in hard-hit metros loosening up, lagging cities should gain momentum and offer unique recovery investment opportunities, especially in harder hit property types,” Chang says.

There are still some speed bumps ahead, he says, including materials and labor shortages and inflationary concerns. But “despite all this,” according to Chang, “the commercial real estate outlook for 2022 remains positive. Whether you invest in a market that’s ahead of the employment curve or behind it, there are always opportunities. You can focus on recovery strategies, momentum strategies, or something else, as long as you keep your eyes on the horizon.”