The Real Deal Miami

U.S housing market relies on jobs to increase demand for homes

January 03, 2011 02:09PM

With an abundance of unsold homes, housing markets across the country now are relying on job growth and the recovering economy as a way to boost demand and prevent loans from going into foreclosure, according to the Wall Street Journal. “The number one biggest risk is that, for whatever reason, the overall economy does not grow sufficiently to produce any meaningful rebound in jobs,” said housing economist Thomas Lawler, who founded Lawler Economic & Housing Consulting, which provides analysis and forecasts of housing trends.
For commercial real estate investors, less hiring has translated into fewer new jobs to fill empty office space and less consumer confidence to spur activity. The past year was a difficult one for the housing market, experts said. Home prices stabilized in the first half of 2010 as the government offered tax credits to encourage sales, but transactions dropped to 15-year lows after that stimulus expired. Many analysts expect home prices to decline by an additional 5 percent before stabilizing later this year. [WSJ]