A huge spring spike in London-­area home sales — the likes of which realtors haven’t seen since before the recession— begs the question.

Does all that home-buying — sales up 23.4% in June over the same month last year, on top of a solid 5% increase in May — add up to another sign the region’s hard-hit economy is finally pulling out of the doldrums?

Maybe, maybe not, observers say.

Pent-up demand after the brutal winter, the harshest in years, is widely credited for the spring sales surge.

But in a city running a 7.7% jobless rate, higher than the provincial and national averages, there’s at least the hope the back-to-back monthly sales hikes — the best since 2007 — are a harbinger of better things to come.

“People aren’t as worried about the economy and their own situation,” Jim Holody, president of the London St. Thomas Association of Realtors, said Tuesday. He also cited factors like low mortgage rates.

After a slow winter, when numbers fell about 15%, year-to-date sales have now pulled ahead — up 2.8% over 2013.

Holody says an improved job market is boosting confidence, with solid job gains in April and May pushing down unemployment.

But one veteran economy-watcher is more cautious, saying the spring numbers could simply be a “dead cat bounce” — a short-term reaction to consumer demand built up over the harsh winter.

“Things got so bad in the winter, both in the U.S. and Canada because of the cold, that a lot of purchases got shifted into the spring,” said Mike Moffatt, a professor at Western University’s Ivey Business School.

“There are still some dark clouds on the horizon.”

A total of 981 homes were sold in the London-St. Thomas market in June, on top of nearly 900 the previous month.

Housing sales can be a strong indicator of where an economy is headed, making the spring results stand out.

In contrast, the numbers were down about 15% during the winter as London struggled to bring its jobless rate below 8%.

New monthly unemployment numbers are due out within days, but London’s 7.7% rate in June — which analysts saw falling as the economy rode the coat-tails of an improving U.S. economy — was still almost a full point higher than the national average.

Holody said he believes the strong sales will continue in coming months.

One London realtor, bullish on the market, says “we’re only seeing the tip of the iceberg.”

But asked if the booming market reflects a change in the economy, Alex Lau of Realty Executives is a little more reserved.

“To say the economy is bad, I guess, is an overstatement.It’s still generating steam. It’s not full throttle yet,” he said.

Lau said London’s affordable prices are attracting skilled immigrants and convincing young post-secondary graduates to stay.

“I think London is such a unique market that we sustain ourselves,” he said.

Moffatt said he expects the Canadian housing market will remain a bright spot, but said London’s fate is closely tied to the U.S. economy which sank 2.9% in the first quarter of 2014.

“It was a really bad winter,” he said. “If we get another quarter like that, it’s technically a recession. Given all the other numbers we’re now seeing from the States, we should see growth in the second quarter. But you never know.”

He noted local manufacturers could also be hobbled by high oil prices and the recent rise in the Canadian dollar’s value.

London’s jobless rate has been gradually trending down, but until recently that was largely because more people were giving up looking for work and were no longer counted as unemployed.

With files by Dan Brown, The London Free Press

hank.daniszewski@sunmedia.ca

twitter.com/HankatLFPress

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AREA HOME SALES

2014 compared to (2013)

June 981 (795)

May 988 (941)

April 864 (880)

Year-to-date 4,351 (4,218)

How we compare

Average June prices