Jobs are crucial to a sustainable recovery in the housing market. People who are unemployed or fear they might be soon don’t buy homes.
According to the Bureau of Labor Statistics, the seasonally adjusted unemployment rate was 9.8 percent in November 2010, up from 9.3 percent in 2009, though that rate fell to 9.4 percent in December 2010.
About 8 million jobs have been lost during this economic downturn, the biggest job loss since the Great Depression. Only 1 million have been added, according to Ken Rosen, chair of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. Rosen doesn’t believe the job market will fully recover quickly.
Location is vital to determining if a housing market is stabilizing, moving up or continuing to decline. Recent data from online real estate company Zillow, which offers home-price estimates, indicates that U.S. home prices will probably lose value in 2010 compared to 2009. However, four of the largest 20 markets analyzed by the company did not decline in value: Los Angeles, Boston, Riverside (Calif.) and San Diego.