Northern California’s housing market and economy maintain growth in 2012
(Northern California–February 20, 2013) Now that 2012 has come to an end, optimism is much greater than in the past few years, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.
The overall Northern California economy continues to strengthen. Annual Job creation has remained positive for 24 consecutive months, and through August, the Region added 102,900 jobs; of which 92,100 were in the Bay Area while Sacramento added 10,800 new jobs. ”The Bay Area region job market is stronger than most throughout the state. All areas of N. CA have experienced annual job growth with the exception of Napa which lost 200 jobs,” said Greg Gross, director of Metrostudy’s Northern California Region. The Regional unemployed population dropped below 10% and now stands at 8% compared to the State level of 9.7%. The Bay Area and Sacramento are at 7.6% and 9.8% respectfully.
Northern California annual housing starts are up 76% from 4Q11, and closings are up 86% from 4Q11. Clearly bucking the trend of the historical slow, fourth quarter. “The annual start pace is at the highest level since 2008 and the annual closing rate is nearly as high as 1Q11,” said Gross. Closings have been outpacing starts for more than four years now. As a result, inventory levels are now below equilibrium.
Finished inventory of housing has been steadily decreasing over the past year now. With 1,926 finished vacant homes, the market now has 3.2 mos. Single family detached product comprises of only 615 finished vacant; a 1.5 mos. There are 298 units in Sacramento; a 1.6 mos, There are 317 in the Bay area; a 1.4 mos. The inventory level of attached product is 1,311 finished and vacant units, a 7.2 mos and another 2,704 units under construction with the majority of attached product being the Bay Area.
Lot inventory has declined 13% over the past year and now stands at 19,526 and mos declined to only 40. There are about 275,000 future lots in the pipeline with fewer than 16,000 lots being developed now; a very small number considering the size and potential demand of Northern California. “Considering the barriers to development, the N. CA market may soon be facing a lot shortage,” said Gross.
“Home buyers are beginning to shop around and those who have suffered a foreclosure three years ago are beginning to enter the market once again. Given the above, Metrostudy expects the Bay Area housing market to continue improving through 2015 as the job situation continues improves and housing inventory shrinks,” said Greg Gross.
For information contact:
greg gross @ 916-231-9370
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.