I have previously written how there has never been a national correction in the U.S. real estate market. Well what we’re looking at now is not exactly a national correction, but it is a noteworthy occurrence nonetheless: we’re marking the first year-on-year national decline in median home prices since governmental housing agencies started keeping statistics on pricing.
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The reason that this doesn’t necessarily represent a national correction is that even though the national median is down, there remain some regional markets that have continued to rise. As investors we know this and we’re watching our local markets.
The New York Times comments about the housing number, and two things pop out at me from this article. The Times does refer to the current market as a national decline, stating that the statistic contradicts “widely held notion that there is no such thing as a nationwide housing slump.” This clearly is a statement that was written by a journalist, not by an investor. As I've stated above, it simply isn't true.
A second annoyance is that the NYTimes article is chock full of predictions, from the likes of Moody's and Global Insights. Predictions by economists are notoriously un-useful.
But a decline in the national median might be significant if it contributes additional confusion and fear to an already volatile lending market. Liquidity has already started to dry up in some areas which pulls competition out of the market. This is bad for sellers, but it's good for buyers. You bargain hunters out there looking for a quick flip better have better confidence in your crystal ball than I have in mine, but buy-and-hold investors in undervalued markets should be on the lookout for solid positive cashflow investments that will weather the current storm with some upside once the market turns - whenever that may be.
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