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Freddie Mac: Bay Area Housing Markets Gaining Strength and Stabilizing
Tags: California, Frank Nothaft, Freddie Mac, marin, MiMi, Multi-Indicator Market Index, San Benito, San Francisco, San Jose, San Mateo, Santa Clara, stable, weak | Filed in: Market Conditions, Market Insights
A new tool to judge the overall health of state and local housing markets has good news for Bay Area homebuyers and sellers:
While a shortage of inventory has restrained sales in the region in recent months, conditions overall are improving and moving steadily toward stability. The San Francisco metro area ranked 13th among the nation’s top 50 metro markets in terms of stable housing conditions, according to Freddie Mac’s Multi-Indicator Market Index (MiMi). The San Jose metro area performed even better, ranking 10th. The San Francisco area includes San Francisco, Marin, and San Mateo counties, while San Jose includes Santa Clara and San Benito counties. Freddie Mac’s tool uses a mix of data sources to establish a measure of housing stability. A zero reading indicates a perfectly stable market, and scores from minus-2 to plus-2 fall within the overall stable range. Negative numbers indicate a weak market; positive numbers point to overheated activity. By that measure, San Francisco scored a minus-2.74 — a weak market, but not far from the most-stable metro area, San Antonio, at minus-1.28, and far better than the least-stable, Las Vegas, at minus-6.64. San Jose scored a minus-2.6. California ranked 27th among the 50 states with a score of minus-2.81. The nation as a whole scored minus-3.08, indicating weak conditions overall. Freddie Mac Chief Economist Frank Nothaft said the MiMi tool was developed to better answer the question “Are we there yet?”, with “there” meaning anywhere close to a normal housing market after several years of upheaval. “Given the pickup in sales, new construction, and home values over the past couple of years, it’s fair to ask if we’re there yet,” Nothaft said in a statement. “Is the U.S. housing market back to a normal range of activity with a good balance between demand and supply forces?” Click here to read more (Image: Flickr/Ulf Liljankoski)