Unemployment and the real estate sector go hand in hand. With no steady source of income, not many were looking to invest in real estate. And with foreclosures increasing, many homeowners were left frustrated.
“Ten years ago, if someone lost their job, they could just buckle down and find another -- but not anymore. Nowadays there is so much insecurity, people are so afraid of losing their jobs that they are putting off buying a home,” Red Blue Realty said in a statement.
But the situation is fast changing with unemployment rates going down in a majority of metros.
According to the data provided by the Bureau of Labour Statistics, 276 metros reported an increase in employment; 93 reported a decrease and three remained unchanged. The largest over-the-year employment increase occurred in New York, Los Angeles and California areas.
Meanwhile, this decrease in unemployment is sure to shoot up demand for housing. For instance, in Los Angeles where 86,300 jobs were added last year, the property market is booming, especially for high-end apartments.
The Miami Herald also reported that the Los Angeles housing market has stabilized with steady sale of homes being recorded. Also, slow growth in the job market has not escalated prices to alarming levels, with June recording an increase of 1.7 percent from the previous month, according to The Standard & Poor's/Case-Shiller 20-city index released recently.
But low inventory in a number of markets can further push home prices upwards, warn experts.
"If the Central Bureau of Statistics labor market figures are correct, policy-makers have a reason to worry that home prices are liable to swell to bubble level. The drop in unemployment rate, low interest rate, the rise in housing demand, and the fall in the housing supply, support higher prices," the Gloves quoted DS Apex chief economist Alex Zabezhinsky.