Slow moving economy in California

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by Kay Murchie

Property sales are weak in California and could remain that way until late 2008. A rise in unemployment and poor job growth is adding to a slow-moving economy.

Employment sectors and construction related to the property market have cut jobs as a result of the housing slowdown. It is believed it will be a while until the economy works through its property depression. The major job cuts have taken place throughout the mortgage industry, this has been shaken recently by many brokers going bust or seeking bankruptcy protection.

The increase of average home prices has been varied across California, high-flying counties were experiencing year-over-year declines, while others have been flat. An average home sold in California in May 2007 was just under $500,000. Luxury homes, however, have outpaced the lower end of the property market which has helped skew the average price figure higher.

It is expected that the Federal Reserve won’t cut interest rates until the final quarter of 2007, this will postpone a housing market upturn until 2008.