2012 home sales in the Bay Area were up in January. Several key economic reports showed surprising gains. And even the long job market turned in positive numbers in the initial weeks of the new year.
Bay Area home sales in January jumped to their highest level for the month in five full years, according to DataQuick, the La Jolla-based real estate research firm. A total of 5,479 new and resale houses and condos sold in the nine-county region during the month, up 10.3 percent from January 2011. This marked the seventh straight month of year-over-year sales gains.
DataQuick attributed the improvement to:
o lower home prices,
o record-low mortgage interest rates,
o a surge in investor purchases and
o an improving economy.
While the jump in sales is encouraging, the firm cautioned that activity was still tilted heavily toward distressed sales in many Bay Area markets. As a result, the median sale price dipped 2.8 percent from the previous month and 3.6 percent from a year ago.
Even more encouraging for the housing market, the labor market is steadily improving. Initial weekly unemployment claims fell 15,000 to 358,000 in a new report by the Labor Department. And the four-week average fell to its lowest level since April 2008, the period before the financial crisis. Finally, the unemployment rate has dropped to a three-year low of 8.3 percent.
Most analysts agree that in order to have a self-sustaining recovery in the housing market we first must have a significant turnaround in the job market. There are indications with improvements in recent months that could be happening at long last.
While all of these economic and employment reports give us reason for optimism, we can’t ignore the fact that the housing market still faces some challenges before returning to normalcy.
Sales have rallied in the new year, but we’d like to see the mix of homes selling move more towards the center of the market and become less reliant on distressed sales. That’s happening in many communities, but far from all.