Real estate trends are very localized. Allow me to explain my point. We see articles on a National level that are starting to say that the worst is over and the market is improving (Article). Looking at the overall national level, statistics show that this is a true statement. But like the weather on any given day across the United States, it's great in some areas, and not so great in others. Let's use the weather analogy on a more local level. In the Phoenix metro area during the monsoon season, you can have a regular day in some parts of the Valley of the Sun, and thunderstorms in another area! It's very localized! The real estate market is similar in the sense that one part of the metro area can be experiencing true signs of "recovery", and in other areas there are true signs that the going is still pretty rough.
I happen to love statistics, but when you see them you have to understand that while the numbers are valuable, they can be too general. And as a result, they can paint an incomplete and inaccurate picture. In my opinion, there is one local statistic that really does that - and unfortunately we see this statistic published and quoted frequently, and it's not painting an accurate picture. The figure I am referring to is the Total Number of Active Listings in the Phoenix metro area. To get an accurate picture, not only does this need to be broken down by REGIONS in the metro area, but it needs to be broken down by DWELLING TYPE.
Let's talk about breaking things down by regions first. I haven't taken the time to confirm this with statistics, but from my own personal experience as local Realtor, I have found that different regions of the Valley of the Sun are experiencing a far greater increase in new active listings than others. 'd be willing to bet that if this were broken down by region, and these statistics compared on a continuous monthly basis, the statistics would support my theory. This information would be beneficial to both the public, and the real estate professional.
Now let's talk about breaking things down by dwelling type. I've been a real estate professional in the Phoenix metro area for a long time. And it's my opinion that condos and townhouses are a fairly new dwelling type to hit the local metro area. Don't get me wrong, I have nothing against this type of dwelling, and in fact expected this dwelling type to increase and start flooding the market as our average home prices began to rise dramatically in 2005. I saw the same thing happen when I lived back East in the 1970's and 1980's. So here's my point. I haven't taken the time to confirm this with statistics, but I'd be willing to bet that if we took the total listings of the Phoenix metro area in May 2006, we'd find that 95% of that total would consist of single family detached homes, and 5% would be condos, townhouses, and other non single family detached homes. But if you check that same scenario in May 2007, you will find that 17% are condos, townhouses, and other non single family detached homes. Condos and townhouses have flooded the market, and their numbers are skewing the Total Number of Active Listings in the Phoenix metro area. If I am right, then the single family detached home inventory has actually dropped over the past year! Personally I think this is important information to both the public and the real estate professional.
As I said above, I love statistics and the numbers are valuable, but they can be too general. And as a result, then can paint an incomplete and inaccurate picture. Just my humble opinion...
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