Jobs, foreclosures, option-adjustable-rate mortgages and interest rates are among the top trends that could dictate what will happen in California's housing markets this year.
The Feeling Better Theory
The implications of high unemployment for housing aren't easy to sort out since the link betwen housing and jobs remains something of a mystery. "Housing is the leding indicator relative to economic activity , but housing markets seem to have their own rhythms" according to Richard K. Green, director of the USC Lusk School of Real Estate in Los Angeles. "While employment trends usually follow housing trends, the cause hasn't been determined. Speculation is that people are just feeling better,and they are more willing to make a commitment like buying a house," he says.
The "feeling better" theory suggests that job security, rather than employment prospects may be the key to unlock California's housing markets this year. Californians who feel secure about their income for the next five or 10 years may be more likely to buy a home than thow whose job situation seems less stable.
Interesting that in my conversations with buyers and sellers, there is an undertone sense that they are "feeling better" about the market overall.
2010 will prove to be a better year than 2009 for real estate in San Diego, is my humble prediction.
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