The economy is generally strong, a real estate expert told a Modesto audience Monday, but a shortage of homes is keeping many people from getting the place they want.
The jobless rate and several other indicators have improved from the recession that followed the housing crash nearly a decade ago, said Carmen Hirciag, senior research analyst at the California Association of Realtors.
Hirciag, addressing a group of appraisers, said the inventory of homes for sale is lagging behind the growing demand. Median sale prices in the Northern San Joaquin Valley have increased, though not nearly to their peak around 2005.
“This is actually a good thing,” Hirciag said. “It means we’re not in a wild and crazy and unsustainable market.”
The Northern California Chapter of the Appraisal Institute held its annual conference at the DoubleTree Hotel. Its members provide home-value estimates that banks use when lending money to buyers, and they also appraise farmland and other business properties.
This is actually a good thing. It means we’re not in a wild and crazy and unsustainable market.
Carmen Hirciag, on modest rise in home prices
The north Valley was one of the epicenters for the financial crisis that shook the nation in 2008. Home prices had risen much faster than incomes, leading to foreclosure for 1 in 7 homes in the region and huge losses for Wall Street firms holding mortgage-backed securities.
The overall economy has recovered, adding about 14 million jobs to more than replace the nearly 9 million lost in the recession, Hirciag said. The north Valley has been slower, especially in home construction, which all but disappeared after the crash.
The jobless rate in January was 4.9 percent nationally and 9.4 percent in Stanislaus County.
On the bright side, Hirciag said, interest rates remain low, and there has been a gain in “household formation,” including young adults finally able to move out of their parents’ homes.
The downside: The number of homes on the market lags, as measured by how many months it would take to exhaust the current inventory. The latest figure for the Central Valley is 4.2 months, compared with 6.9 months five years ago. The inventory is just 2.4 months in the Bay Area.
Modesto-based appraiser John Hillas, immediate past president of the chapter, agreed with Hirciag that the job numbers are still a concern.
“We’re seeing some limited construction, but we still don’t have the jobs,” Hillas said.
John Holland: 209-578-2385
By the numbers
- $244,550: Median price for single-family homes sold in Stanislaus County in January
- $370,103: Median price in September 2005, the peak of the housing boom
- $129,863: Median price in February 2012, the worst of the housing bust
- $192,000: Median price for single-family homes sold in Merced County in January
- $344,615: Median price at October 2005 peak
- $96,666: Median price at January 2010 bottom
- $293,840: Median price for single-family homes sold in San Joaquin County in January
- $426,829: Median price at June 2006 peak
- $147,053: Median price at April 2009 bottom
Source: California Association of Realtors