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Is California Real Estate Market Improving, Albeit Slowly?

Monday, April 5, 2010 by Doron F. Eghbali

It seems- based on the latest data - the California real estate market is slowly improving. However, relatively high unemployment and slow job growth either seriously imperil such improvement in CA real estate market or appreciably prolong its tangible results.

S&P/Case-Shiller Price Index

The latest S&P/Case-Shiller home price index has some cautiously optimistic news for Californians. In fact, the index shows home prices in CA had strong gains in January. Los Angeles rose - on a seasonally adjusted basis - 1.8%. San Diego rose 0.9% and San Francisco inched up 0.6%.

MDA DataQuick

Last month MDA DataQuick reported that CA home sale prices were up for February almost 1%. Nonetheless, CA home sale prices were down almost 3.8% from February of 2009. MDA DataQuick also reported that median price for a home increased 11.2% from a year earlier.

SOME CAUTIOUS OBSERVATIONS

The Latest data provide us with cautious optimism on the state of CA real estate market, for the following reasons:

Home Prices Have Fallen by 50% to 60%: Already home prices have fallen by 50% to 60%.
Combination of Various Factors Have Propped Up the Real Estate Market:The amalgamation of cuts in prices, mortgage rates and federal and state programs are propping up this battered sector, albeit slowly.
Home Prices Have Seemingly Stopped Falling: Albeit there is a slow growth, prices seem to have stopped falling.

CAVEATS

Yet, the relatively high unemployment rate in CA and the nation as a whole and reluctance of employers to add employees to their work force imperil any tentative recovery. In fact, unless people have jobs to pay their mortgages and feel relatively and reasonably secure about their future, any improvement in CA real estate market could be at best slow or ephemeral.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. He Primarily Practices Business, Real Estate and Entertainment Law. He Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

Posted at 10:35 AM

Topic: Residential Real Estate