HOME SALES RESEMBLE BARGAINS AGAIN...DELINQUENCIES ARE DROPPING...FEWER LEAVING STATE, DATA SHOWS

These are just a few of the newspaper headlines recently.  In fact, there is a lot of positive news.  Even though the National jobs report was bleaker than expected, southern California's, although still shy of pre-recession numbers, has been one of the healthiest rebounds in the state.  Perhaps "rebound" is still too strong a word to describe our job market, but nonetheless, the local unemployment rate is third lowest in the state and the best in our region, according to the state Employment Development Department.  The top spots for low unemployment belong to Marin and San Mateo counties in the northern part of the state, Orange County bests all others down south with 7.4%.  Although there is still some hesitation on the part of employers to hire freely, there is still more reason to be optimistic than a year ago.  Now what about housing bargains?  This column has often argued that to have a mentality that it is better to rent than to own at any time, is perhaps to simplify the home ownership debate to a most basic level of nothing more than out of pocket expenses per month.  In other words, why own and have a house payment of two thousand dollars, when you can rent for $1,400.  But this argument forgets tax savings, equity build up and more importantly, (as we covered in recent months), an inflation hedge.  If you buy a home with a fixed rate mortgage, which right now is in the high 3 or low 4 percentiles, your housing costs in twenty years will be exactly what it is now.  Anyone want to venture a guess what your $1,400 rent payment will be in 20 years.  And you will never receive a dime of that back because you can't sell your rent house or apartment, you don't own it.  As housing demands rise, and they are rising the quickest they have in the last decade, landlords have good incentive to raise rents, simple supply versus demand.  Affordability is another big incentive as it hit the highest mark ever for the country at 77%.  Probably the best incentive, is the housing payment itself, driven by low interest rates.  You can get one right now for just about 13.5% of your income.  Granted, this is a generalization because it's based on the national median housing cost, and the national median income.  Housing costs are higher here, obviously, but so is income.  Plus FHA has become a big part of the housing home loan picture, with many borrowers qualifying even though they earn over $100,000.  What about fewer leaving the state?  California had its biggest mass exodus in 1993,4,and 5.  Those of us who lived here, remember it well.  It was a dismal time.  Defense spending plummeted, causing massive layoffs in defense, a major California employment sector, and military bases simply disappeared.  Southern California basically lost a million jobs over 5 years.  Although the numbers were nothing close to that in 2005,6,and 7, the state did see the highest numbers in a decade.  But by 2009, the number fell to 112,000, which for a state with California's population, is not a startling number.  But if you look at 2010, we have a population increase and no net exodus.  This according to the Tax Foundation-- an anti-tax group that's not partial to California, but still reported that we're losing fewer people to other states.   All told, there is reason to be optimistic about where California is headed.  We have oceans, beaches, desert, mountains, skiing, and moderate temperatures, and a more highly skilled work force than most other states.  We have some good reasons to be optimistic.  People need to live somewhere.  Ain't real estate great?