Ohhhh... The Ever-Changing Market- I'm typically optimistic regarding several sectors of the real estate market. The statistics that most of us see tend to give a macro-view. This only makes sense because news agencies tend to want to capture a wide audience. However, the large view is overwhelming- it paints a picture that often has limited value at the local level.

Knowing this, I like to understand smaller target markets. I take a micro view. So, what I report to my buyers tends to be more narrowly focused. I can show results for areas and look for the bright spots... for instance, neighborhoods that tend to hold value. When I blog about this the information holds value for that snapshot in time.

Some of the data I gathered in the first quarter showed promise in certain areas that, after looking at the second quarter gives me pause. This is a polite way of saying that some of the "charmed areas" are less charmed in the past month or two. Conversely, some other areas are now showing improvement.

The problem with bogs is that they lay static. Fresh information today could become obsolete quite quickly. It just happens this way. Markets don't stay still. And, until we invent the auto-updated blog formula, the static blog entry is seldom capable to last the test of time- especially entries with statistics.

For my clients, please know that any time we search for a home- whether it be to sell or purchase, we will always want current information. Whether you read something in a blog or at a news site... or if you hear it on the radio or television... the news you acquire has a set of "what ifs" that should be verified or evaluated before making any decision. This is the duty of every real estate agent- to stay on top of the market and advise accordingly.

I have to admit to being a less confident in my ability to advise regarding certain factors in the market these days.... some of the data of the past two weeks has been of an imposing nature. There are issues both bad and good that are muddying the picture. Here are the factors that have a volitilty to them... that is to say- their influence on the market is large enough that it makes any statistical analysis more difficult:

• Stringent lending guidelines and varied appraisal philosophies- the lending market has tightened to the point that the definition of "good credit" has risen upward. Also, lenders are being more concerned with appraisals... many are factoring for potential market declines.

• Massive devaluation of large lending institutions- the largest banks wield great power in the financial sector. When they lose close to half their value in a short time period that creates a void... massive amounts of paper wealth simply disappear. This skews data.
  

• Increasing cost of energy. I read one poll that said that 95% of all Americans are changing their driving habits in light of the cost of fuel. I don't know where that poll is now or I'd link to it. Does it really matter though? It doesn't take one article or poll to convince the average person that the cost of fuel has an impact on their expenses.

• The market has headed into "bear" territory. There are rallies and profit taking, but the market has begun to act bearish.

• The other bigs: each of these can have an impact on their own but collectively they pack a wallop. These other factors include rising unemployment, rising inflation, rising food costs, depleting savings rate. When taken together the total picture is harder to read.
  

There- that's the bad news. Still- that is not to say that all is lost. These embroiled conditions give rise to opportunity. Among the bright spots for the home buyer are these:

• Low cost- Homes have become extremely affordable. If anyone needs a residence the buying market is plum- good deals abound. Even with other money challenges, today's mortgage is typically more affordable than last year's mortgage.
  

• Great financing- The rates are not as bad as the media may lead one to believe. There are still great loan programs that offer low rates and varying forms of assistance.

• Vitality in certain sections- There are neighborhoods in recovery... places where prices are rising and days on market are declining. Yes- some homes are receiving multiple offers.

The key to this understanding and responding to this market is no different now than ever in one regard- those who seek to understand the current market conditions will benefit. Though the market is harder to read right now, when one narrows the focus to the most essential elements the benefits and pitfalls can be weighed in the balance. It's always been about the due diligence.

Perhaps the brightest bit of news comes from the recent current cover article in Barrons (Bottom's Up: This Real-Estate Rout May Be Short-Lived) which states, "Buried in the numbers, however, and widely ignored in the media, was the news that home prices actually rose, albeit slightly, between March and April, in eight of the 20 markets covered by the index (Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Portland, Ore., and Seattle). This was in sharp contrast to the readings for March, which showed prices falling in 18 of the 20 surveyed markets. Also, the pace of monthly price declines is starting to slow in most of the markets with negative readings."

Again- real estate is local. News, bad or good, will be finely nuanced for each section of the market.

--------

Chuck Willman helps investors and home buyers in the Phoenix Metro area and surrounding Arizona cities.

www.AZvest.com - 480.292.0600

-------

Photo Credit: "Fresh" by the talented Photographer SonyaSeattle