Signs of recovery in US housing market
The battered US housing market looks to be on the mend as buyers make a tentative return and house prices stabilise.
Sales of new homes in February fell from January but jumped more than 11 percent compared with the same month last year and prices rose, according to data released on Friday that was in line with other recent signs of a slow recovery.
SANTA CLARA COUNTY -- New job figures show an improving Valley economic picture. The February unemployment rate in Santa Clara County stood at 8.8%.
Employment figures in Santa Clara County continued to outpace the state. The state's unemployment rate remained at 10.9%.
The Valley added nearly 8,000 jobs last month. Year over year, the numbers are up by 26,000 jobs. The construction industry led the way, lending further credence to reports of a Valley real estate upswing.
The Bay Area economy created 15,400 jobs in February, raising total employment in the region to the highest level in three years, the state's Employment Development Department reported Friday.
But despite positive job growth in the Bay Area, the net gain statewide was a mere 4,000 jobs.
"California's economy is being led by the Bay Area," said Scott Anderson, senior economist with Wells Fargo Securities. "The Bay Area is certainly the bright spot in the state."
The Bay Area has added jobs for seven consecutive months, and all three major urban centers in the nine-county region -- which includes Solano -- are now making significant employment gains. The South Bay added 4,100 jobs last month, while the East Bay gained 3,200 and the San Francisco-San Mateo-Marin region added 7,100, seasonally adjusted figures showed.
"The Bay Area is producing what the world wants," said Jon Haveman, chief economist with the Bay Area Council's Economic Institute. "High-end computer manufacturing, information services, professional and business services are all doing well and creating jobs."
A flock of eager buyers competing for fewer-than-usual homes for sale is sending prices soaring along the Peninsula, where Googlers and Facebook employees duke it out with foreign investors for a place to live.
In other parts of the Bay Area, pent-up demand has helped create a hot market for lower-cost homes, with buyers having to move fast to grab foreclosures and be prepared for stiff competition on other homes for sale. In Contra Costa County, pending sales of single-family homes are up about 62 percent from last year and inventory is down 32 percent -- a seller's market.
Mortgage rates may have finally hit bottom.
The benchmark 30-year rate has risen above 4 percent for the first time since October, according to mortgage giant Freddie Mac.
The average rate for 30-year, fixed-rate mortgages rose to 4.08 percent from 3.92 percent, Freddie said. Last year at this time the rate averaged 4.81 percent.
While the Federal Reserve has helped push rates down to record-low levels with an unprecedented easy-money policy, signs of economic growth now are beginning to push long rates higher, said Freddie Mac economist Frank Nothaft.
If you're waiting for home prices to go up, then you're missing signs the troubled housing market has finally turned around.
FORTUNE – Over the past few months, many economists have concluded that that the U.S. housing market has reached a turning point and is healing. This may sound hard to believe, since home prices have continued their downward trend. In 2011, prices fell by 4% following nearly a 30% decline since the property bubble paeked in June 2006. They ended the year at a 10-year low.
A number of housing markets nationwide have been seeing modest increases in median list prices. In the last year alone, median national list prices ticked up 6.82 percent year over year in February, according to Realtor.com data of 146 metro markets. And a number of markets have seen increases in just one month by 3 or 4 percent.
The following are the eight metro areas that saw the highest median list price increases from January to February:
1. San Jose, Calif.
Month-over-month increase: 4.20 percent
Median list price: $468,888
The nation's shadow inventory remained flat in January compared to October figures but shrunk about 10% from levels seen a year earlier, according to new data from CoreLogic.
Shadow inventory totaled 1.6 million units in January, a six-month supply, down from January 2011 when it stood at 1.8 million units, a supply of eight months.
The flow of distressed sales (short sales and real estate owned) offset the roughly equal flow of new seriously delinquent (90 days or more) loans into the shadow inventory.
I still believe that a bottom is coming for housing in 2013. Some areas of the country, like the Silicon Valley area of Northern California, have already left a bottom far behind. On March 14, 2012, CBS This Morning ran a segment called "Silicon Valley Surge: Facebook IPO Creates Home Sales Boom." One real estate agent interviewed in the piece claimed that the mini-boom in house sales really got jumping February 1st once Facebook (FB) announced its IPO. However, the following quote from a real estate agent really got my attention:
There is nothing artificial about it. Its people have the money.
March 15, 2012
La Jolla, CA.--Last month’s Bay Area home sales bounced up a bit more off bottom, fueled in large part by investors with cash who were buying discounted properties in the lower half of the price spectrum. The median price paid for a home dropped year-over-year for the 17th month in row, a real estate information service reported.
A total of 5,702 new and resale houses and condos sold in the nine-county Bay Area in February. That was up 4.1 percent from 5,479 in January, and up 14.2 percent from 4,991 in February 2011. The year-over-year sales increase was the eighth in a row, according to San Diego-based DataQuick.
A January-to-February sales increase is normal for the season. Last month’s sales count, which got a lift from an extra business day thanks to the leap year, was the highest for a February since 6,305 were sold in 2007. It was 9.0 percent below the February average of 6,268 sales going back to 1988. The sales pace for most months last year was 25 percent to 38 percent below average.