U.S. ADDS 216,000 JOBS & U.S. LAYOFFS LOWEST SINCE 1995

These were a couple of very encouraging headlines starting out the second quarter of 2011.  Not only were these figures higher than expected, but unemployment also dipped to its lowest level since 2008.  In a recent article OC Register writer Jonathan Lansner had a similar headline, "Job Growth Could Cure Ailing Market."  The gist of the article is really found in the Beacon Economics updated housing forecast for California.  Research manager Jordan Levine finds some optimism that is driven by, "rising employment and incomes, which we project to grow by between 4% and 6% on the income side and 2% to 3% on the employment side."  In other words, people really do need jobs to buy a house.  And their income needs to be proportional to the price.  Something the sub-prime and stated loan programs seemed to forget.  The other encouraging things was that these jobs were "real" jobs; not seasonal, not minimum wage, but substantial jobs in technology, import, service, management, and manufacturing.  Originally the Fed thought job recovery would be 5 complete years.  Statistics now suggest that job recovery will happen by installment, both in types of jobs and location.  Remember, it is projected (see last month for details) that California may be a little slower than some parts of the country, since we were hit so hard by the loan meltdown, but Southern California, specifically Orange County, was projected to emerge first.

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DEMAND FOR HOMES REACHES 7 MONTH HIGH

There are also articles stating the opposite.  "Winter Doldrums Worsen, Defying Usual Pattern," was seen on March 16th.  It was published just as demand was taking off.  More on the actual numbers later, but they are down compared to both the month before and the year over year.  But remember, a year ago we had a federal tax credit that was driving thousands of buyers into the market.  This year that is gone, and so the numbers we have may not be quite as high, but they reflect the true market and the true level of recovery.  According to the Orange County Home Inventory Report from Steven Thomas, pending sales at the beginning of the year were1,856.  Since then, it has increased by 61%.  What may be more interesting is a look at "market time" which is how many days on the market it takes a property to sell.  You take that number and combine it with how many properties are available and you get your "market inventory."  In other words, if not another home came on the market starting today, how many months would it take to sell everything we've got, at our current pace.  A seller's market is said to be under 6 months, an even market about 6 months, and a buyer's market at more than 6 months.  Well, right now, believe it or not, that number is under 6 months.  And yet prices are falling.  We may never see this exact market phenomenon again.  Buyers are sensing that there are some very good deals on the market.  But because financing is tight and because there is much competition from REO (real estate owned by banks), cash is king and cash can generally get a lower price.  But, having said all that, it is not uncommon right now to see multiple offers on in demand properties in good locations in the right price range.

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