Unfortunately, it seems everyone has their panties all in a bunch about the apparent crash of the housing market. The problem is that you can’t take of all the local housing market’s conditions and boil them together into some hysterical stew. It’s like suggesting divorces throughout the country mean the end of marriage or the moral failure of 10 big religious leaders means the crash of religion. The building industry is not a national industry. Yes, when the housing industry is adversely affected in multiple locations simultaneously, the negative affect is felt nationally; but there is no such thing as a national housing industry.
The pundits need to be careful that their pontification from on high doesn’t worsen a situation nationally that is largely managed and determined on a county-by-county basis. Jonathan Miller is a Director of Research for a New York based real estate research company and says this, “There is no ‘national’ housing market. Different markets have different risk factors and fundamentals that drive prices” Jonathan is correct. While the current market in Montgomery County Maryland is in the tank, nearby Pittsburg is doing quite well. Where the negative results of fast price escalation have left some housing markets reeling, others, that never experienced the escalation, hardly feel the situation. Remember, it’s only a recession if you or someone you know looses their job.
Richard Gaylord, President of the NAR (National Association of Realtors) recently pointed out this fact: “Keep in mind that home prices are up in 93 out of 150 metro areas, and there is a lot of confusion in the market from reports about national data…” He went on to say, “Broadly speaking, home prices in most areas are up modestly or fairly stable.”
The housing market in your local area is mostly affected by factors within your local area: housing inventory (new and used), job growth, land availability and prices, and labor. Any of those factors can affect your market from outside your area. For instance, sales in a metropolitan bedroom community can be adversely affected by the slow resale pace of the metropolitan area. But, largely, the real estate market you deal with can stand on its own.
I’m not suggesting the national picture is not relevant, it is. Gas prices are at all time highs. Consumer confidence is still performing well below national standards and declining household equity leaves families feeling poorer. Nationally, resale housing inventory is still hovering at around 10.3 months of supply and new home sales have dropped to their lowest since April of 1995.
All that said, it is a great time to buy a new home. Interest rates are still very low and builders and sellers are in the mood to negotiate more than ever. Don’t let the national news scare you out of the market. It’s a great time to buy.