DELICIOUS
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REDDITAlthough the experts cannot agree who coined it, nor when it first entered the lexicon, the phrase “location, location, location” as it applies to real estate has become axiomatic in today’s world.
All Across America
Back in 2007-2008, the real estate market imploded, in some instances literally overnight. As the national recovery has lumbered along for the better part of a decade it is now more important than ever to understand the concept of “market trends” in whatever locale one might be dealing with.
“Market trends” would include house prices of course, but also interrelated issues such as marketing times, interest, housing supply, mortgage interest rates and others.
Regional Impact
Back in the day, the US was very city-centric. That is to say, most people lived relatively close to major business/commerce centers, where access to the everyday necessities was restricted. Geographically speaking.
Then came automobiles that were affordable to everyday people, roadways made to handle more traffic, etc. Today we have interstates, multi-breadwinner households and other factors that have caused us to decentralize our lives. Today we see that dad works ten miles west of home, mom works downtown (about twenty miles south of home) and Bobby and Susie attend a private school located twelve miles to the northeast. You get the gist.
Metropolitan Statistical Areas
A Metropolitan Statistical Area (MSA) is the government’s way of defining an area with at least one urbanized core which shares socioeconomic ties with the region surrounding it. Instead of just thinking of Houston, TX or Denver, CO we now have the Houston-The Woodlands-Sugar Land, TX MSA and the Denver-Aurora-Lakewood, CO MSA.
There are dozens of these MSAs delineated by the government across the country. Real estate works in much the same way these days, not necessarily with 100% overlap in terms of market areas and MSAs. But, the MSA concept is a pretty solid analogy for the real estate idea.
Regional Market Trends
The value of real property tends to be cyclical, which is to say there are periods of home prices increasing and periods of them decreasing. Most recently, and arguably most infamously, was when the “bubble burst” in 2007-2008. In many minds, the housing bubble “burst” evokes an image of a child’s freshly blown soap bubble floating along and suddenly going “POP!” I however, having lived through it as a professional in the industry, have always thought the “bursting” more akin to the Death Star after Luke’s missiles exploded.
But I digress. Of interest here are more current happenings, so let’s look at a few:
–Real estate near San Francisco Bay Area: The California Association of Realtors’ charts seem to indicate a rapid rise in sales from late 2014 through 2015. However, there has been a sharp drop-off in sales in 2016.
–Real estate near Research Triangle in North Carolina (an area with the triangle points being NC State University, Duke University, and UNC-Chapel Hill) is rising as well. According to a story published by local TV station WRAL, the area appears to be enjoying a period of rising prices, fast inventory turnover and low marketing times. In the old school vernacular a “sellers’ market.”
–Real estate near Miami-Dade County in Florida: According to a recent story in the Miami Herald, the housing market may be facing a slowdown. After a few years of sales price increases, it seems the ceiling may have been hit and they are facing an oversupply situation. In the old school vernacular a “buyers’ market.”
Taking A Page from the Boy Scouts
“Be prepared!” Great advice if a hurricane or blizzard is headed your way, if you’re planning a trip out into the wilderness or if you’re going to jump into the real estate market. While it’s always a good idea to keep up to date on the overall real estate market nationwide on CNN or in “The Wall Street Journal,” as the information above shows every region can be experiencing very different market conditions. Take the time and get to know the local market you will be dealing with.
