Seattle has been a gold rush town for tech jobs for years. That gold rush just hit a wall.
And a big chunk of those cuts landed right in the Seattle area.
Amazon.com alone told 2,100 Seattle-area workers they were out of a job in January. Meta Platforms followed with nearly 1,900 cuts in the region. When that many high-income earners suddenly stop shopping for houses, the local housing market feels it.
Seattle's median home price dropped 2.3% in May from a year earlier, according to Redfin data. Meanwhile, the national median price rose 2% over the same period. That gap is not an accident. In January, the Seattle area's jobless rate reached its highest point in five years, but has since moderated.
State lawmakers did not help. They added new taxes on wealthy households and big companies, which only adds to the uncertainty for people deciding whether to buy a home.
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DR Horton is a homebuilder that specializes in starter homes for first-time buyers. That makes it especially sensitive to what happens in a market like Seattle, where a lot of those buyers used to work at Amazon or Meta.
On an analyst call Tuesday, CEO Paul Romanowski called out "weakness out in the Northwest." He pointed straight at Seattle, saying the shift in software jobs and more layoffs have created "some headwinds to demand." DR Horton now anticipates a lower number of home sales this year than its previous projections.
Investors took the news in stride, mostly. DR Horton's stock slid as much as 1.9% that day. Not a crash, but a clear signal that the market does not see this getting better overnight.
The housing market at large already faces challenges including elevated mortgage rates, inflation, and a shaky job landscape. Add job uncertainty to the mix, and even people who still have good paychecks hesitate.
Here is the part that matters if you own stocks in homebuilders, real estate funds, or even tech ETFs with heavy Seattle exposure.
DR Horton is not panicking. The company has been entering 30 new markets over the past five years. It is still building.
But the CEO said something worth remembering: plenty of buyers are walking through the doors. They just are not signing. Romanowski said, "It's just needing to see them be a little more confident in the overall economy and their ability to move forward with a sale and with a purchase today."
That is the key. The underlying demand is there. What is missing is confidence.
For investors, this is a reminder that local economies matter more than national averages. The U.S. housing market looks fine overall - prices are up 2% year over year. But if you live in or invest in a region that depends heavily on one industry, that industry's troubles become your troubles.
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