All real estate is local... or is it?

By
Real Estate Agent with Century 21 Results Realty

Let's hammer on the NAR some more. 

All real estate is local

The NAR has been pounding this message in response to the perceived unfairness of media reporting.  And while there is a case to be made that the media isn't presenting a balanced picture, I don't know if the current campaign is the answer...

And here is why...

There IS a national real estate market.  Sure, you can't move a house from one place to another... ok, seldom can you... but, that isn't how the market is defined. 

When "the stock market" moves one way or another, it is the aggregation of a bunch of stocks.  Depending on which index you are looking at, it may be dozens, hundreds or thousands of stocks.  And those stocks (and the others lumped in with them) may very well be moving in a different direction from any or all of the indicies. 

And yet...

We don't see a cry from the companies involved that each time CNN says that the Dow declined 50 points that they add "but to find out about stocks you may be interested in, please consult a professional stock broker."  And, it isn't like most people assume that if "the market" is down that all of the stocks in the market are down... just like real estate. 

So, while it is true, whining about it probably doesn't help...

Especially from the NAR.  On the way up, their numbers and spin were basically honest.  On the way down, the spin seemed too self-serving.  So, now when the NAR speaks, EVERYONE throws salt over their shoulder and engages the BS filter. 

Instead, say "it is what it is", stop whining and acknowledge reality... all of the realities.  "The national market looks like it is coming off of a bloodbath, but the damage has primarily been in ___."

But what do I know?

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Rainmaker
600,821
Associate Broker Falmouth MA Cape Cod Heath Coker
http://www.CapeGroup.com & http://www.REindex.com - Falmouth, MA
Heath Coker Robert Paul Properties Falmouth MA

Actually the national picture is pretty positive.  There are a few areas that are getting the attention.  See some of my blog posts or look at the http://activerain.com/groups/PositiveRealEstateNews  AR group for positive real estate news.

Jul 26, 2008 04:49 PM #1
Rainer
8,248
Larry Stewart
Rubiola Realty & Mortgage - San Antonio, TX

NAR. What can you say? Sometimes I feel like the deal with them, state and local associations id one of, "Pay your dues and shut up!" NAR mentioned in my recent blog about "Color Clubs." 

Jul 26, 2008 04:54 PM #2
Rainmaker
248,047
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Lane: Great post. It always seems to me that with my efforts I can get a lot more done locally than nationally. A rising tide floats all boats, and the falling strands all equally.

Jul 26, 2008 04:55 PM #3
Rainer
334,480
Tom Davis
Harrington ERA,DE Homes For Sale, $$ Save $$ Buy Today ! - Dover, DE
FREE Delaware Homes Search!, $$ Save $$ - Find Homes! Delaware Realtor

Real estate is local business and real estate is local,

Thanks,

Tom

Jul 26, 2008 05:11 PM #4
Rainmaker
309,378
Mike Wong
Keller Williams Realty Southwest - Sugar Land, TX
Realtor: Commercial, Residential, Leasing, Invest

I play off the NAR marketing and use it to my advantage.

Gosh just like all the late night infomercials, if it's on tv it must be true!

You didnt know you can:
Buy real estate for just pennies on the dollar.
The real estate market is local.

Jul 26, 2008 05:38 PM #5
Rainmaker
363,351
Susie Blackmon
Ocala, FL
Ocala, Horses, Western Wear, Horse Farms, Marketing

Hi Lane, I am constantly amazed at the information I overhear conveyed to the public by realtors.  More often than not, they aren't necessarily whining, but they are fluffing the truth, or they aren't looking at the numbers.

Jul 26, 2008 06:23 PM #6
Rainmaker
716,608
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

Hi Lane,

I don't know what things are like where you are, but in my area there is a tremendous problem.  Because of its proximity to NYC and because White Plains is the "new hot place to be." Prices at the very local area haven't budged.  They are even up slightly this year for condos and coops.  Yet everyone comes to me with a "fire sale" and "I wanna deal" mentality which the comps won't support.  That's the problem.

So there are local issues that can't be ignored.  The NAR ads are moronic and always HAVE BEEN moronic...In many ways although the message is correct (for some parts of the country) - the messanger needs to be taken out at dawn and shot!

Jul 26, 2008 07:17 PM #7
Rainer
274,607
Adam Waldman
Westcott Group Real Estate Company - Hauppauge, NY
Realtor - Long Island

LANE - I understand your analogy, but I think that there is one very big difference between the stock market and the housing market.  People are not necessarily being scared away from making a decision to purchase stocks, but they are waiting for it to be safe to buy a home.  This is the wrong approach to take for a few reasons. 

First and foremost, real estate IS local.  I do market reports on 12 different school districts each month, in addition to waterfront homes, new construction and bank owned homes.  Some districts are already on the rise while some are flat or slightly declining.  There are good opportunities in the waterfront market as well as new construction, but bank owned homes are selling fairly quickly, and for very close to asking price.  This may not be true in parts of the country that have tons of bank owned homes, but around here it is.

Aside from real estate being local, there is also the issue of living.  You cannot live inside of a stock, but you do live in a home.  There are tax advantages to owning a home that don't exist in stocks. 

The bottom line is that if you need to buy, then it is a great time to buy.  Another reason why the stock market shouldn't be compared to the housing market is that buyers that keep their cash on the sidelines instead of buying stocks will always have an opportunity to buy something else.  Buyers that are relying on national real estate trends to determine their purchasing decision of a home may find themselves with a lot less buying power, especially if the mortgage rates start to rise.

If people are interested in a certain area, they should do research to find out if prices are actually already on the rise, because real estate really is local.

Jul 26, 2008 10:19 PM #8
Ambassador
890,780
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Heath - The national picture is less negative than it used to be... that isn't the same as positive.  But it is still only bad in a few places. 

Larry - Because they've chosen to try to spin instead of being transparent, they are sliding into irrelevancy as an information source for the media. 

Matt - The falling tide strands the boats on the sand bars before the ones in deep water.  Mostly we have deeper water... but those stuck boats are getting all of the attention. 

Tom - Way to add to the conversation. 

Mike - uumm... yea.

Susie - There is a LOT of that.  People try to turn their anecdotal experience into a fact. 

Ruthmarie - That is it.  People expect that the market isn't what it is.  Sellers think that the reality doesn't apply to them, and buyers think that it doesn't apply to them either. 

Adam - I know where you are coming from...  With the exception of living in stocks, every argument that you made applies to stocks and homes equally. 

  • The media reporting of down market days pushes buyers (investors) to the sidelines... further fueling and spreading declines.  The difference is that stocks are more liquid, and price discovery is faster.
  • Some of the investments i own have been up dramatically even while the broad market declined... others, not so much.  Stocks are just as local as the housing market... just a bit fewer points (every property is a unique issue).
  • If you sit in cash on the sidelines waiting for the bottom of a particular issue or sector, you may lose the opportunity to have the same buying power for that stock or issue... and find that you have to buy less or elsewhere. 

We are absolutely in agreement that consumers need to talk with local professionals about the local options... but the NAR whine isn't making things better. 

Jul 27, 2008 03:15 AM #9
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