Real estate prices rise in Bay Area
California's real estate market is making significant headwind in its economic recovery. Data from the past year indicates that housing prices are on the rise, foreclosure rates are down and inventory levels are decreasing, which could attract potential homebuyers looking for a new home in a strong metro economy.
Real estate in San Jose is having a record year. The Business Journals reports that the San Jose area has the highest concentration of high-end housing in the nation. The median cost of all owner-occupied houses, apartments and condominiums in the greater region was $618,100 in 2012 - almost $57,000 more than the runner-up, which was the Francisco-Oakland area.
In addition, nearly two-thirds or 63.8 percent of all San Jose properties are valued at $500,000 or more. According to the news source, that is five times the collective rate of 13.9 percent for the country's 109 major metro markets.
The San Jose-Sunnyvale-Santa Clara area featured 354,510 occupied housing units in October 2012. Of those properties, 28.35 percent or 100,513 were worth between $200,000 and $499,000. The other 226,034 homes occupied in the region were valued at prices above $500,000.
One of the prevailing reasons attributed for the spike in property prices is the overall improvement of the region's economy, as job numbers are pointing toward increased employment.
According to the United States Department of Labor, the civilian workforce in San Jose-Sunnyvale-Santa Clara was 950,400 in October 2012 - up from 946,000 in September 2012. The unemployment rate for the region was 7.9 percent, the same as the previous month, but down from six months ago when it was 8.4 percent.
Improving employment figures in key industries for the region could boost a potential homebuyer's ability to purchase a property. A healthy job market is often a helps promote competitive compensation, job maneuverability and career stability.
Industries like professional and business services, manufacturing and education and health services are thriving in San Jose. There were 179,400 workers in the greater San Jose region employed in the professional and business services sector in October 2012 - up 3.2 percent in a year-over-year comparison. The manufacturing field saw employment rise to 161,300 in October 2012 from October 2011. The education and health services sector employed 122,900 people October this year - a spike of 2.8 percent from the same month in 2011.
Improving employment opportunities in these fields could result in more people purchasing one of the homes for sale in San Jose.
While employment opportunities have substantially increased, the cost of living in the greater Bay Area, as characterized by San Francisco, has increased as well. According to the U.S. Department of Labor, the Consumer Price Index for the region has increased by 0.7 percent in the two months preceding October 2012 - and risen 3.2 percent in a year-over-year comparison. Much of this hike in cost of living was seen during the summer and fall months of 2012 - as the nation's economy continued to post improved numbers.
According to the source, food prices have increased by 0.8 percent from August 2012 to October 2012. Most of these cost increases were for foods meant to be consumed at home, as opposed to restaurant-purchased meals. Energy prices also increased, rising 4.6 percent for the two month ending in October 2012. However, experts claim this is typical as energy bills usually increase during the winter months even in the more temperate climate of the Bay Area.
Despite the slight increase in cost of living, the market in San Jose is still posting plenty of positive signs that could prove attractive to potential homebuyers.