People move for a variety of reasons - a desire to live somewhere new or better, family priorities, life changes, proximity to valued resources, or career considerations. Often times, a buyer’s dream home is right around the corner rather than across the country. If this is the case, does it make sense to look at national statistics when it comes to real estate research or are local numbers a better indicator of what the market will bear? National figures are simply the average of what is happening across the country. A big-picture view of the real estate industry can be vastly different when you actually break down the numbers, region by region – reinforcing the industry mantra that all real estate is local.
The housing market barometer recently retired by Trulia, generated statistics based on construction starts, existing home sales, and the delinquency-plus-foreclosure rate across the nation. What the real estate website determined, and many industry insiders concur, is that each stat considered locally is more relevant than the data collected nationally. For example, Big Dig Construction in the 1990’s and 2000’s affected Bostonians on a day-to-day basis for more than a decade and was considered a major hassle to commuters during those long, turbulent years. It was not until the completion of the project in 2005 that real estate values in surrounding areas started to rise and Bay State developers began to build in the newly-defined access areas. Californians on the other side of the country, however, did not suddenly see a jump in their property values due to what was happening on the East Coast - and more specifically in Greater Boston. Conversely, the housing market in the Boston area does not take an unexpected hit when natural disasters occur on the West Coast wiping out housing inventory and altering sales patterns.
Local perspective is key when looking to buy or sell a home especially when you consider that cross-continental moves are rare. Most people tend to settle down in the same general geographic area to be close to family and work. Northeasterners, in particular, plant their roots locally despite very few up and coming communities to consider and a well-populated housing market that has been going strong for four centuries. In the Bay State, construction does not necessarily translate to more housing inventory but more so an update to existing stock. With limited land available to buyers and developers in Greater Boston, new housing prospects are minimal - unlike less historic, newly developed parts of the country where housing construction can be directly linked to an increase in market inventory.
For a more realistic view of today’s real estate market, savvy buyers and sellers should also review existing home sales and foreclosure rates, as suggested by Trulia. Rather than limit that research to national statistics, a well-versed consumer will analyze local numbers too. For example, local home sales and sales prices rose more so in the Boston area than in other parts of the country, year to date. Even with promising sales prices and patterns in the region, low inventory continues to thwart interested buyers waiting on the sideline. As we go forward, market-relevant numbers should be used to evaluate the strength of the local housing market rather than a national snapshot. Buyers are wise to research target communities, compare recent sales prices – and consider important regional factors such as the economy, employment statistics, historic value, access to major metropolitan areas, quality of life virtues and buyer/seller profiles. The business world, our government, consumer preferences and shifts in American culture will continue to impact the real estate industry today and tomorrow. If the “it” neighborhood, “preferred” community and world around us changes with each new generation, doesn’t it make sense that the real estate industry adjust its key housing metrics to evolve with the times?