Job growth and an increasing number of homes for sale are two necessary ingredients for an ongoing recovery in the California housing market. On that front, we've got two positive economic data points to highlight.
California Employment
California employment is up 0.6 percent, or 83,000 year-to-date (January through May 2013). The year-to-date growth mirrors employment gains over the same period in 2012, a year that saw the fastest pace of California employment growth since 2006. While we would like to see January-May employment gains hit 100,000 to 125,000 new jobs, a growth rate consistent with moderate economic growth, 83,000 jobs means we are heading in the right direction.
Source: St. Louis Federal Reserve – http://research.stlouisfed.org
California Single-Family-Home Construction Permits
California single-family-home construction permits reached 14,617 year-to-date (January through May 2013), a 51 percent increase from 9,690 over the same period in 2012. While the current year-to-date total is a far cry from the 40,000 to 65,000 permits issued in January through May from 2000 through 2006, the latest increase is certainly a positive sign.
Source: St. Louis Federal Reserve – http://research.stlouisfed.org
More jobs will likely boost housing demand. An increase in construction permits will likely lead to more housing inventory later this year or next. Both of these factors are significant positives for the California housing market over the next six to 12 months.