A new report out Tuesday shows the real estate market in the Bay Area is hot.

San Francisco home prices have surged nearly 25 percent in the past year; the biggest increase in seven years. That’s more than double the nationwide average of major cities.

According to the SP/Case-Shiller index that ranks metropolitan cities, Las Vegas reported the next biggest jump at 23 percent, followed by Phoenix at nearly 21 percent.

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Article source: http://abclocal.go.com/kgo/story?section=news/business&id=9190210

It’s a good time to sell your house. Home prices in 20 major markets are at their highest in seven years. You can bet the San Francisco Bay Area is on the list.

The S P/Case-Shiller home price index calculated growth rates for a 12 month period ending last February. They looked at 20 major markets and found home prices went up 9.3 percent.

The housing recovery’s been driven by near record low mortgage rates, lower unemployment and more buyers than sellers.

This last factor is a big one in California and the Bay Area where the inventory of homes on the market is one of the tightest in the country.

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Article source: http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=9085727

San Jose resident Jim Mielke was gassing up his work van this morning at a Shell station on The Alameda, which set him back just over $90. He’s deferring some home improvements because of the rise in gas and food prices. By not spending money, he realizes he’s hurting the home improvement store or the materials supplier, which impacts their ability to keep employees on the payroll.

On the other side of the pump, contractor Dave Caputo confirms that work has been slow because of people cutting back on non-essential spending, not to mention the slowdown in real estate sales and the related drop in repair and remodeling jobs.

That cycle is contributing to the unexpected drop in job creation in May. The Labor Department said only 54,000 new jobs were added last month. That’s the lowest number in eight months. Economists had been projecting double that number.

Professor Mario Belotti, Ph.D., an economist at Santa Clara University said it’s not just a downturn in consumer spending that’s causing employers to throttle back. It’s also the impact Japan’s earthquake and tsunami have had on the auto industry, economic turmoil engulfing several European Union countries, and on-going civil strife in Northern Africa and the Middle East.

We are also talking to tech companies in Silicon Valley and job seekers who have been searching for work for two to three years. We’ll have an updated story later today online and on ABC7 News at 5.

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Article source: http://abclocal.go.com/kgo/story?section=news/consumer&id=8169621