Housing Lifts Post-election Economic Outlook

David M. Cabot, CEO

With the election behind us, most of the uncertainty that held U.S. markets in suspense is gone. Much of the good news lifting consumer confidence is in the housing sector, which is showing strong signs of stability and recovery.

The rate of home ownership has returned to a more sustainable 65.4%, the same as the mean set in 1997, according to the U.S. Census.

“National credit scores are the highest they’ve been in 12 years,” says David M. Cabot, CEO of Prudential California Realty. “The housing market is returning to normal, with more qualified borrowers adding stability and increasing demand.”

Benchmark 30-year fixed rate mortgage interest rates hovered near all-time lows in November, making borrowing costs for housing compared to other forms of credit irresistible. Home prices have risen nationwide for seven straight months and housing inventories are below six-month levels, found the National Association of REALTORS®.

In California, housing supplies are critically short.  September sales volume was down 5.2% from August on a tight 3.7-months’ supply, reported the California Association of REALTORS® (C.A.R.).

The median price of a single-family detached home in California was $345,000 in September 2012, up 19.5% from $288,700 the previous year, according to DataQuick.  Median California home prices peaked at $484,000 in 2007, hit bottom at $221,000 in 2009 and are currently at $287,000, the highest level since August 2008.

“There’s still good news for buyers,” observes Leeann Iacino, COO of Prudential California Realty. “While California prices were rising rapidly, the typical mortgage payment for borrowers remains 63.9 percent lower than the 2006 peak. It’s an excellent time to buy a home.”

With almost 3,000 sales associates in 60 offices across Southern California and the Central Coast, Prudential California Realty represented over $9 billion in sales volume in 2011.  Recognized as one of the top five brokerages in the nation and one of the largest affiliates in the Prudential Real Estate international network, Prudential California Realty is proud to be a member of HomeServices of America Inc., a Berkshire Hathaway affiliate.  HomeServices of America represented almost $32 billion in residential real estate sales with 114,500 transactions in 2011 and closed over $3 billion in home mortgages.

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