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Housing market is ‘bright spot' of economy, according to state REALTOR® official

Wednesday, October 17, 2012

The housing market is "the bright spot of the economy," a California REALTOR® official told Silicon Valley REALTORS® last week. The fundamentals are sound and should carry through 2013, she noted.

California Association of REALTORS® vice president and chief economist Leslie Appleton-Young told members of the Silicon Valley Association of REALTORS® that overall, it has been a strong year for housing. The market has held its own without tax credits, government programs or stimulus. Demand is up because mortgage rates are still at 50-year lows. A tight inventory is pushing prices upward in many areas of the state.

"Home prices are snapping back slowly," said Appleton-Young.

The statewide median price of an existing, single-family home edged up 0.3 percent from the August median of $343,820 to $345,000 in September. The September figure was up 19.5 percent from $288,700 recorded in September 2011. September's median price was the highest since August 2008, when the median price was $352,730.

The shortage of inventory is producing mixed results in home sales, according to Appleton-Young.  In August California home sales rose 6.5 percent from the same month the previous year. In September, home sales fell 5.2 percent from August and were down 1.2 percent from September 2011. Low inventory – especially in distressed areas – is dampening sales activity and in some areas like Silicon Valley, sales are higher because their economies are growing faster than other parts of the state.

"Yours is the strongest regional economy by far," Appleton-Young told Silicon Valley Realtors.

Appleton-Young shared positive economic indicators with the REALTORS®. Consumer confidence is improving. The Consumer Confidence Index declined to 61.3 in August but rose to 70.3 in September 2012.

Unemployment dropped from 8.1 to 7.8 percent in September. California, which lost 1.3 million jobs during the recession, has added 485,000 jobs since January 2010. Much of that job gain is in Silicon Valley.

Nationwide and in California, housing permits are slowly rising. California housing permits were at 52,000 units in September 2012, up 10.4 percent from 2011. Pent-up housing demand is looming as the state's population continues to grow. In time, this gap will be filled with the return of construction, remarked the C.A.R. state official.

"The market is working itself through," said Appleton-Young.

C.A.R. projects home sales in 2012 will increase 5.1 percent from the 497,900 existing, single-family homes sold in 2011. Sales in 2013 are expected to rise 1.3 percent from this year's sales. The statewide median home price is forecast to increase 5.7 percent to $335,000 in 2013.  Following a decrease in 2011, the California median home price will climb a projected 10.9 percent in 2012 to $317,000.



The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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