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It's all about the jobs

Posted by Scott Van Voorhis June 5, 2012 10:02 AM

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Without more job growth, home prices are likely to continue to stagnate.

That's the common sense verdict of Jed Kolko, Trulia's chief economist, of signs that recent home prices gains across the country are starting fizzle along with new job growth. Kolko's comments come as Trulia puts out its latest home price and rental rate report this morning.

The areas that are starting to see signs of a price turnaround, he notes, are those with more robust job markets. (Don't have the Boston numbers yet - the Trulia numbers just hit the wires at 10 a.m.)

Here's Kolko:

Asking prices and employment both stagnated in May, yet one more reminder that the housing recovery depends on job growth. The metros where prices rose the most have stronger demand from faster job growth and tighter supply from fewer foreclosed homes on the market.

OK, I know I was dissing apartments the other day, but rentals are likely to remain popular amid our never ending economic uncertainty, poised between a real recovery and another downturn.

Asking rents were up 9.8 percent in the Boston area this May compared to May 2011, compared to 6 percent nationally. That makes the Hub No. 5 when it comes to rent increases, with San Francisco, which saw a 14.4 percent leap during the same period, at No. 1.

The rental market remains popular, and for good reason.

This blog is not written or edited by or the Boston Globe.
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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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