I was helping one of our CENTURY 21 real estate agents explain current market conditions to a customer the other day and I was locked into a debate on current and future trends in the Tallahassee housing market.
This customer is very intelligent and has been a builder in the Tallahassee housing market for many, many years. He expressed that “all of his friends in real estate” believed the market was rebounding and that homes were already starting to appreciate. Obviously, I disagreed.
Like his friends in real estate, I wish the housing market had returned to appreciation, but it is simply not true. This is something that we can (and do) measure. As a matter of fact, this real estate blog and our Tallahassee Real Estate Market Report are dedicated to the study of the Tallahassee housing market and we stay very current on market conditions.
Be Wary Of Most Opinions On The Housing Market
This conversation got me wondering … “why are real estate professionals incorrectly telling him the market is appreciating?” Unless I am missing something, I believe it is for one of two reasons:
- They really do not know the current market conditions because it is not something that they study, or
- They are not telling him the truth, for one reason or another.
I figured either way, he might want to consider branching out for more information. The fact is, there is an abundant supply of information available that allows us to study the housing market using scientific methodologies. People who need to make major financial decisions should utilize this empirical information to their advantage.
Rely On Empirical Evidence In Real Estate
Scientific evidence is considered empirical when it can be observed by many people and all will agree as to what they observed. An example would be reading a thermometer. No matter who observes the thermometer, it still displays the same temperature.
The counterexample to this is physically sensing warmth or coolness. Observer A might sense that a room is warm, while observer B senses that the same room is cool. These observations differ depending on the observer, and are therefore considered subjective. Evidence that is not dependent on the observer (i.e., is objective), that appears the same no matter who observes the evidence, is considered to be empirical evidence.
So using this example, people who want to see the market get better might have a tendency to see the good indicators in the housing market, yet ignore the bad indicators. I suggest that consistent measurement of all of the trends will help us gain the best perspective on the current and future trends in the Tallahassee housing market.
Tallahassee Home Sales Up Longer Than Down
A great look at real empirical evidence can be observed by the trend of home sales in Tallahassee over a long period of time. The real estate graph below shows all of the recorded home sales (even ones that were non-arms-length) from 1992 through August of 2009.
[click to see graphs and real estate forecast…]
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