Help for housing
With an estimated 100,000 people relocating out of the state this year what is going to sustain our housing market and keep it from falling like a rock?
Interest rates will continue to climb. The outlook for the year is 6.5 percent average which is a full percentage point above rates of a year ago. So forget about any super low interest rates.
Investors have quit buying and are holding their investment. Last year nearly 20 percent of all homes sold were to investors.
Flippers have deserted the market. They have put their properties up for sale or sold them already to reinvest their proceeds elsewhere.
Bay area buyers have been a force in driving up home values in the Capital Region but over the last few months Bay area buyers have had difficulty selling their homes. The market for 2,000 square foot, million dollar homes, in political blue counties has declined along with interest in our real estate.
Financing will still be available but probably not as creative as it has been. Federal regulators have issued instructions to lenders to be more cautious with their lending guidelines. Zero down loan programs, interest only payments and loose underwriting guidelines will makes qualifying for a loan more difficult.
So do we enter 2006 without any major force to sustain home price appreciation? Yes, jobs and income.
Employment and average monthly household income will cushion the housing market as it gently settles into a more traditional growth pattern. California employers keep expanding. Last month they added 20,000 new payroll positions according to the California Employment Development Department. The new hires were in all fields of employment.
Anyone looking for a job can probably find one. “The labor market is healthy. There is no real sign that there is danger on the horizon,” according to Scott Anderson senior economist with Wells Fargo & Company.
The job growth in the Sacramento Region continues to outpace the state. Between December of 2004 and December of 2005 there has been a 1.7 percent growth in employment in the region while the state’s overall job creation rate is 1.3 percent.
Employers like the Capital Region. Our work force is educated. Our housing prices are affordable (in comparison to the Bay Area or Southern California) and parking is available. Our highways may be congested but traffic usually moves unlike many freeways I can name in Southern Cal. Business usually is better in state capitals. State government added 1,500 jobs last year bringing the total employment to 103,000 and additional 2,000 state employees are expected to be added this year.
Unless the state enacts job killing legislation, employers will continue to add employees who will then require housing. Employment will sustain the housing market if taxes, fees and regulations remain stable. A big IF with our legislature.
Interest rates will continue to climb. The outlook for the year is 6.5 percent average which is a full percentage point above rates of a year ago. So forget about any super low interest rates.
Investors have quit buying and are holding their investment. Last year nearly 20 percent of all homes sold were to investors.
Flippers have deserted the market. They have put their properties up for sale or sold them already to reinvest their proceeds elsewhere.
Bay area buyers have been a force in driving up home values in the Capital Region but over the last few months Bay area buyers have had difficulty selling their homes. The market for 2,000 square foot, million dollar homes, in political blue counties has declined along with interest in our real estate.
Financing will still be available but probably not as creative as it has been. Federal regulators have issued instructions to lenders to be more cautious with their lending guidelines. Zero down loan programs, interest only payments and loose underwriting guidelines will makes qualifying for a loan more difficult.
So do we enter 2006 without any major force to sustain home price appreciation? Yes, jobs and income.
Employment and average monthly household income will cushion the housing market as it gently settles into a more traditional growth pattern. California employers keep expanding. Last month they added 20,000 new payroll positions according to the California Employment Development Department. The new hires were in all fields of employment.
Anyone looking for a job can probably find one. “The labor market is healthy. There is no real sign that there is danger on the horizon,” according to Scott Anderson senior economist with Wells Fargo & Company.
The job growth in the Sacramento Region continues to outpace the state. Between December of 2004 and December of 2005 there has been a 1.7 percent growth in employment in the region while the state’s overall job creation rate is 1.3 percent.
Employers like the Capital Region. Our work force is educated. Our housing prices are affordable (in comparison to the Bay Area or Southern California) and parking is available. Our highways may be congested but traffic usually moves unlike many freeways I can name in Southern Cal. Business usually is better in state capitals. State government added 1,500 jobs last year bringing the total employment to 103,000 and additional 2,000 state employees are expected to be added this year.
Unless the state enacts job killing legislation, employers will continue to add employees who will then require housing. Employment will sustain the housing market if taxes, fees and regulations remain stable. A big IF with our legislature.
posted by Ken Calhoon at 9:31 AM
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