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A short sale home in Las Vegas. Short sales have begun to supplant foreclosure-related sales in the U.S. market.
The real estate market is California has improved - slowly and steadily - but a shift is underway. Real-estate data firm RealtyTrac, which specializes in foreclosure information, has released its 2012 U.S. Foreclosure and Short Sales Report and it indicates that short sales are supplanting foreclosure-related transactions in the state.
A short sale is, in essence, a kind of foreclosure without the the bank getting stuck with the property. In a short sale, the lender agrees to accept less than what’s owed on a home — but the homeowner locates a willing buyer. The process can take a while. But for borrowers who are underwater on their loans — and many in California still are — a short sale can be one way out of a bad financial situation.
It also means that the homeowner avoids foreclosure.
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Tract homes in Santa Clarita, California. The September Case-Shiller index shows prices in the U.S. rising 3 percent year-over-year.
The latest numbers show Los Angeles home prices increased in September.
The S&P/Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The September figures are the latest available.
The September Case-Shiller index, the most highly regarded set of numbers on the U.S. housing market, shows home prices increased 3 percent over September 2011, the eighth straight month of price increases. But for L.A. the story is a bit subdued.
The Los Angeles housing market got absolutely crushed during the financial crisis. At this stage, the city could use more robust price appreciation.
From August to September, prices in L.A. moved up 1 percent, which was slightly worse than August's 1.3 percent. The month-over-month number hasn't been higher than 2 percent on the plus side since May.
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The California unemployment rate fell to 10.1 percent in October from 10.2 percent in September, according to the Labor Department.
California added 45,800 new jobs in October, leading the nation, but the state's unemployment rate remains high. At 10.1 percent, California ranks third, behind Nevada and Rhode Island. The September unemployment rate was slightly higher, at 10.2 percent, the Labor Department reported.
So, progress, but slow progress. California's pace of job creation is impressive. Of the 171,000 new jobs the entire U.S. added in October, 27 percent were in California. And since the beginning of the year, California has added nearly 300,000 jobs, outperforming Texas by a decent margin and outpacing New York by more than 2 to 1.
However, in a truly healthy recovery, the U.S. would be adding 300,000-400,000 jobs each month. And a lot of those jobs would be in California. So an overall sluggish rate of hiring is keeping the state's unemployment rate in double digits.
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A construction worker cuts a piece of wood on the top of a home under construction at a new housing development on in Petaluma, California. A recovery in housing is developing in the state, according to UCLA economists. But it's geographically uneven.
For a while now, the economists at the UCLA Anderson Forecast have been arguing that California is experiencing a two-track economic recovery from the Great Recession. The coastal side of the state is doing relatively well, while the inland regions are struggling. Other economists dispute this analysi; they maintain that the recovery is more robust in Northern California than it is in the Southern California.
A key lens to look through when trying to figure out which analysis is right (and really, both have some merits) is real estate. The UCLA Ziman Center for Real Estate and the Anderson Forecast have just released an brief report on the housing situation, written by economist Jerry Nickelsburg. He notes that prices appear to be moving up in California:
The aggregate California home price statistics are encouraging....The S&P Case-Shiller
Index for San Diego, San Francisco and Los Angeles is the highest it has been since June 2011 and the median sales price is now the highest since 2008.
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A "we are hiring" sign is displayed on a table during the San Francisco Hirevent job fair. California's jobless rate in October fell to 10.1 percent from 10.2 percent.
The California Employment Development Department released its report on October jobs in the state Friday. The federal Labor Department will release its report next week. The story is good, in a tenth-of-a-percentage-point kind of way: the jobless rate fell to 10.1% in October, from September's 10.2%.
In Los Angeles, the unemployment rate dropped to 10.5 from 10.6%.
"We're seeing everything start to move in he right direction," said Kimberly Ritter-Martinez, an economist with the Los Angeles Economic Development Corp. "We're edging closer to breaking that 10% mark."
That could happen soon if California continues to add jobs as it has at a faster clip than the nation as a whole. In the U.S. jobs are being added at a rate of 1.5%. In California, the rate is 2.1%, driven by the strong performance of the tech sector in Silicon Valley and the San Francisco Bay Area.