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Bay Area's housing market going strong

8 Nov 2012 4:12 PM
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After serving as a locus of high foreclosure activity as recently as a few years ago, California has made significant strides to get its housing market back in shape. Just as much of the country's big cities' markets have begun moving in the right direction, homes in the Golden State have begun to follow suit. In popular regions like Los Angeles and San Francisco, homes have once again been flying off the market and prices have started climbing, according to The San Francisco Chronicle.

Real estate in San Francisco, Los Angeles and other large population centers in California have begun to sell at a pace - and at prices - that were last seen before the housing crisis of the late 2000s, the source reports. Median home prices in the San Francisco Bay Area rose 11 percent, according to real estate research firm DataQuick.

"Much of the pickup reflects a continuation of trends we've seen for months, like the unleashing of pent-up demand in move-up markets and high levels of cash and investor buying," said John Walsh, president of DataQuick.

With its attractive lifestyle and high property values, San Francisco remains a stalwart performer in the California housing market. After a few years with minimal activity, the city has seen several months of strong sales, which has sapped the city's inventory of for-sale homes and helped buoy prices, according to the source.

"It's simply a different market than it was six months ago," Jeffrey Mezger, CEO of KB Home, told the news source. "Inventories have declined and prices are now rising."

The strong demand has had a similar effect on rents. According to the Orange County Register, the average San Francisco rent rose to $1,851 in the third quarter of 2012, a 9.5 percent increase. Like the increasing price for homes, this surge reflects a strong demand going against a quickly diminishing inventory.

According to the source, rental and housing markets typically rise in tandem, which helps explain why residents of the Bay Area - and those considering moving there - are increasingly optimistic about the local market. The active social scene and prevalence of top-tier universities has helped attract younger buyers and renters - so-called "echo boomers" - to the area, which is one reason inventory has been diminishing so quickly.