By Dennis Yen
Today's news really gives us mixed signals about the real estate market. Some say real estate is flourishing and some say that it continues decline. The fact of the matter is that there are quite a few angles from which you can view the real estate market. It isn't simply prices and loan rates, as most people like to report. It's much deeper than that.
One important angle, and the focus of this article, is that real estate ought to be looked at through a regional perspective. Even in a city, each neighborhood has its own characteristics. Some neighborhoods have families that have lived in their homes for more than 20 years, other neighborhoods have homes that are owned by investors, others have young families just moving in... you get the picture. Because each neighborhood is so diverse, the general outlook of the city's perspective may not do justice to the individual gems that are hidden within it. Not all neighborhoods have foreclosures or short sales, or other transactions that could reduce the property value of the neighborhood. A little bit of research, or the help from your real estate agent, can help you determine the state of your neighborhood, or a neighborhood into which you would like to move.
Shifting one's perspective on the regional market outlook can make a huge change in how one perceives the market, as a whole. Keep in mind that despite all that doom and gloom that we are hearing about real estate, transactions continue to occur. First time home buyers are taking advantage of home and loan pricing, and open houses continue to grab the attention of many prospective buyers; from investors to homeowners to home upgraders. People are upgrading from smaller homes to larger homes. By that same token, some folks are moving from larger homes to smaller homes, as they age and look for more simplicity.
There are plenty of reasons that people buy or sell a home. Despite the market, these reasons still exist, and dreams of home ownership continue to be fulfilled. What we hear quite a bit of in the media is how housing starts are low and how people are losing their homes, and the media is coinciding home losses with the lack of home sales. Economically speaking, when a homeowner loses the home, that is one less home that needs to be built, right? So, if many people are losing their homes, then it follows that there is no need to build more homes, as the inventory is still full. That does not, however, mean that home sales have stopped. Make no mistake about it. In some areas of the United States, real estate is going strong. Admittedly, in other areas of the United States, real estate is not doing too well. Again, this goes back to a regional perspective of real estate.
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