Real Estate is Local but Some Factors Affecting Sales are More Global
I'll be the first to agree that real estate markets are, for the most part, local. You'll see a wide range of differences between sold prices and market times, and prices will vary widely by zip code and neighborhood.
But speaking knowledgeably about real estate markets takes more than just knowing the neighborhood or community.
Here are some factors that are NOT necessarily local:
Lending rates and terms - You won't always see a huge difference in rates between your local bank and a mega-lender like Wells Fargo or Bank of America. We all know where mortage interest rates come from and it isn't your local or community bank.
Job Market and Household Income - There may be local to some extent, but you'll get a better idea of major economic factors affecting affordability on a citywide or statewide level.
Mortgage loan availability - This probably won't vary much from one community to another, unless you are looking for a home in an area where there are few comparable recent sales.
The nationwide economy and regional economic factors - The effects of the Federal Government "sequester" and of "austerity" aren't necessarily local, unless you're selling in an area composed of mostly Federal employees. Job furloughs (and the resulting decline in some household incomes affected by those factors) aren't exclusively local either.
Effects of Taxation - Look to the State and County level for the effects of property taxes on your prospective buyers.
Knowing the local area is one aspect of the real estate market (or claiming to know the local market), but it's not the whole picture. Agents like to quote the "real estate is local" slogan when it best serves their business model. Big box firms with many franchises point to "local" as justification for dividing a metro area into little territories, each served by one of their offices. Various listing aggregators (no names needed here) do the same thing, selling territories (for a hefty fee, of course) to an agent who wishes to purchase the title "local expert".
Unfortunately, the public doesn't know how to differentiate between the paid "local expert" and someone who actually knows the market in a particular area. Our industry has allowed the term "expert" to become cheapened to such an extent that it has become meaningless.
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