When real estate developer Joe Sitt went hunting for his latest property, he looked not to New York or London – two cities where his company, Thor Equities, owns upmarket retail spaces – but to Bellevue, Washington, a fast-growing Seattle suburb containing a workforce of more than 130,000 people.

Thor spent $87.5m last month to buy the Bellevue Galleria, a 200,000 sq ft retail and office centre whose tenants include Rock Bottom Brewery, Men’s Wearhouse and Bungie, the video game developer best known as the creator of Halo.

Mr Sitt is betting that the jobs and wealth created by booming tech groups and venture capital companies will generate “enormous potential” in places such as Bellevue.

The US commercial property market is stabilising as businesses begin to hire again, highlighting the role of job creation in the wider economic recovery.

Vacancies will decline up to one percentage point over the next year, with offices and apartments benefiting most as companies hire workers and Americans relocate for jobs, according to the National Association of Realtors. “The big question for the real estate market is, will the recovery continue?” asked Mr Sitt.

Despite increases in initial claims for unemployment insurance, job creation has been strong this year. The US economy added more than 200,000 jobs in April for a third straight month, a pace fast enough to keep up with population growth and reduce unemployment. Economists polled by Bloomberg expect the May report on Friday to show another 200,000 new positions.

Lawrence Yun, NAR’s chief economist, said: “Job growth creates demand for commercial space, and the economy should be adding between 1.5m and 2m jobs annually both this year and in 2012, with the unemployment rate falling to 8 per cent by the end of next year. Given the minimal new supply in recent years, the rising demand means vacancy rates will be trending down.”

Experts say cities with growing technology and energy industries that generate new jobs are performing best, including tech centres San Francisco, Seattle and San José and energy hubs Dallas, Houston and Denver.

Companies will need office space to accommodate their new employees. That demand is likely to push vacancies down one percentage point to 15.3 per cent in 2012. Rents are projected to rise 0.3 per cent this year and another 4.3 per cent the next.

Chris Macke, senior real estate strategist at CoStar, warned developers must exercise “discipline” in how quickly they break ground on new projects.

“Everybody’s getting excited for the rent growth and planning new office buildings, which, if that happens too soon, could curtail the rent growth.”

As Americans go back to work – and those already working get pay rises – they are also likely to go shopping. Retail vacancies are expected to fall half a point to 12.6 per cent next year.

Mr Macke said that growing consumer demand, coupled with the weak US dollar, is boosting manufacturers, which can build quickly to capitalise on the rebound.

Finally, NAR said as younger people who moved in with their parents or roommates earn enough to rent their own apartments, and more people change cities to take jobs, the apartment rental market “has clearly turned the corner”. Vacancies are projected to fall more than one point to 4.7 per cent next year, while rents are likely to rise 3.4 per cent in 2011 and 4.3 per cent in 2012.

Ultimately, analysts said, it is businesses’ confidence in the recovery that will shape real estate’s trajectory. Mr Macke said: “We don’t know what corporate America is going to do on that front.

“They say they are holding back on hiring plans because they don’t know how sustainable the recovery is, but the recovery depends on hiring.”

Homes owned by banks or in some stage of foreclosure are a smaller share of sales these days in the Seattle area, according to a new report.

Such homes accounted for 15 percent of the area’s sales in the first three months of this year, down from nearly 19 percent of sales in the prior quarter and the first quarter of 2010, the foreclosure data firm Realty Track reported. Foreclosures made up 16 percent of Washington sales, down from just over 18 percent in the prior quarter and nearly 19 percent a year earlier.

Nationwide, foreclosures accounted for 27.5 percent of sales, up from 27 percent in the prior quarter but down from more than 29 percent a year earlier. The actual number of  foreclosure sales in the first quarter fell by nearly 53 percent in Seattle, 44 percent statewide and 36 percent in the U.S. from a year earlier.

“While foreclosure sales continue to account for an unusually high percentage of all residential home sales, sales volume is well off the peak we saw in the first quarter of 2009, when nearly 350,000 foreclosure properties sold to third parties,” RealtyTrac Chief Executive Officer James J. Saccacio said in a news release. “While this is probably helping to keep home prices relatively stable, it is also delaying the housing recovery. At the first quarter foreclosure sales pace, it would take exactly three years to clear the current inventory of 1.9 million properties already on the banks’ books, or in foreclosure.”

The average sales price of foreclosure homes in the quarter was $229,128 in Seattle, about 31 percent less than other properties. The average price was $205,824 in Washington and $168,321 nationwide, a discount of around 27 percent in both cases.

Washington’s share of foreclosure sales was the 22nd highest among 38 states in the report. Nevada topped the list, with foreclosures accounting for 53 percent of sales (down from 59 percent a year earlier). California was second, at 45 percent (down from 48 percent a year ago).

Seattle-area home values have fallen farther, faster than those of the nation as a whole, according to a new report.

Area values in the first quarter were down 32 percent from their peak in June 2007, compared to the nationwide drop of 29.5 percent from a peak a year earlier, Seattle-based real estate information company Zillow reported. Values fell 8.2 percent nationwide and 11.7 percent in the Seattle area from a year earlier.

Zillow’s home value index estimate was $259,200 in the Seattle area and $169,600 nationwide in the first quarter.

One area where Seattle fared slightly better than the U.S. was in decline from the fourth quarter of 2010.

Nationwide home values fell 3 percent in the first quarter from the end of 2010 — the largest quarterly drop since the the fourth quarter of 2008, Zillow reported. Seattle’s quarterly drop, 1.7 percent, was down from declines of 3.5 percent, 4.2 percent and 2.8 percent in the previous three quarters.

“Home value declines are currently equal to those we experienced during the darkest days of the housing recession,” Zillow Chief Economist Dr. Stan Humphries said in the report. “With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011. We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won’t see a bottom in home values until 2012 or later.”

In the Seattle area, 34.4 percent of houses with mortgages were “underwater” — meaning the mortgages were larger than the home’s value — in the first quarter, Zillow said. That was up from 34.3 percent at the end of 2010 and 23.9 percent a year ago, and higher than the national share of 28.4 percent, which was a new high for the U.S. number.

Values declined in 97 percent of the 132 markets Zillow tracks. Seattle had the seventh-largest year-to-year drop among the biggest 25 areas but the 21st-largest quarter-to-quarter decline.

Detroit had the biggest drops in both periods — 5.2 percent from the prior quarter and 17.3 percent (tied with Atlanta) from a year earlier. Pittsburgh had the smallest declines, 0.2 percent and 0.1 percent, respectively.

Zillow’s report tracks the value of all homes, rather than just looking at those that happen to sell in a given period.

Foreclosure filings continued to fall in April, but not necessarily because fewer people were behind on their mortgages, according to a new report.

“Foreclosure activity decreased on an annual basis for the seventh straight month in April, bringing foreclosure activity to a 40-month low,” James J. Saccacio, chief executive officer of foreclosure data company RealtyTrac, said in the report. “This slowdown continues to be largely the result of massive delays in processing foreclosures rather than the result of a housing recovery that is lifting people out of foreclosure.”

Filings were down 16 percent in King County and 34.3 percent nationwide from a year earlier and down 22.6 percent and 8.6 percent, respectively, from March, RealtyTrac reported. There was one filing for every 779 homes in the county and 593 homes nationwide.

“The first delay occurs between delinquency and foreclosure, when lenders and services are no longer automatically pushing loans that are more than 90 days delinquent into foreclosure but are waiting longer to allow for loan modifications, short sales and possibly other disposition alternatives,” Saccacio said. “Data from the Mortgage Bankers Association shows that about 3.7 million properties are in this seriously delinquent stage. The second delay occurs after foreclosure has started, when lenders are taking much longer than they were just a few years ago to complete the foreclosure process.”

Nationwide, homes typically took 400 days to go from the initial default notice to bank repossession in the first quarter, up from 340 days a year earlier and 151 days in the first quarter of 2007, RealtyTrac said.

The Seattle area, including King, Pierce and Snohomish counties, had one filing for every 564 homes in April. That was the 67th-highest rate among the 206 U.S. areas with more than 200,000 people, RealtyTrac said. Las Vegas continued to have the highest rate, one for every 82 homes.

Washington had one filing for every 715 homes — the 20th-highest rate among states and Washington, D.C. Nevada had the highest rate, one for ever 97 homes, for the 52nd-straight month.

RealtyTrac tracks documents at several stages of the foreclosure process, meaning not every home with a filing went through foreclosure auction. It tracks homes with multiple filings just once per period.

We have all heard the old adage that real estate is about location, location, location. So, not surprisingly, the city you’re located in weighs heavily when it comes to selling your home fast.

According to Realtor.com, 11 cities can tout the fastest selling time on the market. Despite all of its financial troubles, California can tout the fastest selling time. The state has the highest number of cities “where homes tended to spend the shortest amount of time on the market last month,” reported Realtor.com. This was based on the March housing data from the same source.

The cities in California with the least amount of time on the market before sale are: Oakland (50 median days / median list price $319) and San Francisco (63 median days / median list price $639,000).

In Colorado, Denver comes in next (66 median days on the market / median list price $259,900).

Jumping over to Iowa City, Iowa (66 median days / median list price $187,500). Heading back to the coast, Los Angles-Long Beach, California bumps the time on market up just a bit (70 median days / median list price $345,000). Still in California, Stockton-Lodi area comes in with the same amount of days on market as LA-Long Beach but with a lower list price (70 median days / median list price $175,000). Bakersfield, CA drops the price even lower (70 median days / median list price $141,500). But San Jose, California shoots the list price up significantly and barely increases the time on market (71 median days / $470,000 median list price).

Anchorage, Alaska (median list price $279,975); Fresno, California (median list price $170,000); and Tulsa, Oklahoma (median list price $147,900) all have 71 median days on the market.

There were 146 markets reviewed for the housing data report. According to Realtor.com, “Nationally, the median for homes for days on the market was 160 in March, which is an increase of 40 percent in a year.”

But for those who are selling their homes outside of these markets, the experience can be quite different. Some homeowners are feeling the pinch as their homes sit on the market for long periods of time.

This is in part due to the ongoing battle: lenders holding homes in foreclosure affects home sales in those areas. The New York Times is reporting that the nation’s biggest banks and mortgage lenders are sitting on loads of properties.

RealtyTrac, a provider of real estate data, reported that the number (872,000) of foreclosures owned by the banks/lenders is nearly twice the amount as when the financial crisis started a few years ago. And this is only the beginning; several million more foreclosures are expected over the next few years.

Economists expect that it will take about three years for lenders to sell the properties already in their possession. It’s this groundswell of foreclosures that is creating a vicious cycle–the more foreclosures, the more the prices are depressed, which leads to more distressed sales.

Before you think this is just bad news, there is some hope coming from lenders. Some lenders are working with distressed sellers more now than ever. They are realizing that sidestepping the foreclosure process is better for all, even if the homes are sold for a loss. In some areas, according to the New York Times, that has sped up the pace of sales and “even caused prices to slowly rise in the last two months … .”

Yet another silver lining, at least for lenders, “is that the number of new foreclosures and recent borrowers falling behind on their payments by three months or longer is shrinking,” according to the New York Times.

The hope is that those homeowners can continue to manage through these difficult times.