Realtor Magazine Just Ticked Me Off
I've been in the real estate business for a long time. During all those years as a professional real estate agent, it was drilled into my brain that there is no such thing as a national real estate market.
Why?
Because real estate markets depend on local economic conditions. If the local economy is growing, jobs are being created, mortgage money is plentiful, and home inventory is adequate. Sure, in a market like that local real estate sales are probably doing great.
But, we all learned, in another city or state, jobs could be being exported offshore, wages could be depressed, plants and factories could be closing, mortgage money could be difficult to obtain, and the market may be flooded with available homes for sale. In that case, the real estate market could be in bad shape.
And, we all learned, the thing about houses is that they are not portable. You can't pick up your house and move it to some area where the market is hot and then sell it. If we could do that, half the homes in Florida, California, Las Vegas and numerous other areas would be getting shipped someplace to be sold off.
So, what moves across my e-mail this afternoon? Why an article from the National Association of Realtors.
What did they report?
Nothing much. Only that there appears to now be a national real estate market and it is improving!
Yes, according to Realtor Magazine, "Housing Experts Say Real Estate is Recovering". The magazine states that some of the nation's leading economists believe the housing market has turned and better days are about to arrive.
They claim that jobs are on the increase. They believe credit is improving. And they believe that affordable homes will overcome impediments such as rising interest rates and the elimination of the Federal stimulus program.
Who are these rah-rah gurus? Why, none other than Dean Maki, Chief Economist for Barclays Capital. And Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College. Even Bruce Kasman, Chief Economist at JP Morgan Chase was quoted in the article as saying, "The underlying trend is turning positive."
Somebody ought to take these three guys to a meeting of local real estate agents in Tampa Bay and let us inform them that there is no such thing as a national real estate market for them to spout off about. The only market that matters is the one in which the property you own is located. And since you can't move the house to a better part of the country, you better take into consideration all the bad stuff that might be happening where you live.
If you happen to be in Tampa Bay, you have unemployment hovering around 13 percent. You have prices continuing to fall by about 11 percent annually according to Mr. Case's latest price index report on this area. You have mortgage interest rates that are projected to jump by at least a point over the next few months that a chief economist from JP Morgan Chase ought to know about. You have builders who have just finished 2009 with the worst year on record and have projected an even poorer year for 2010. And locally we have something in the neighborhood of half our sales being either short sales or foreclosures. In addition to all that, we have about a 14 month supply of single family home inventory in the MLS right now, and heaven only knows how much ghost inventory is floating around in Hillsborough, Pinellas and Pasco Counties.
So, from where I sit, if this is a real estate recovery it looks pretty lame to me. But then, I'm just a local real estate agent. What do I know?
Here's the point of all this: The "underlying numbers" that economists are always talking about only matter when they are the numbers you have to deal with in your local market. There is no national real estate scene. And you guys ought to know it.
-30-
Why?
Because real estate markets depend on local economic conditions. If the local economy is growing, jobs are being created, mortgage money is plentiful, and home inventory is adequate. Sure, in a market like that local real estate sales are probably doing great.
But, we all learned, in another city or state, jobs could be being exported offshore, wages could be depressed, plants and factories could be closing, mortgage money could be difficult to obtain, and the market may be flooded with available homes for sale. In that case, the real estate market could be in bad shape.
And, we all learned, the thing about houses is that they are not portable. You can't pick up your house and move it to some area where the market is hot and then sell it. If we could do that, half the homes in Florida, California, Las Vegas and numerous other areas would be getting shipped someplace to be sold off.
So, what moves across my e-mail this afternoon? Why an article from the National Association of Realtors.
What did they report?
Nothing much. Only that there appears to now be a national real estate market and it is improving!
Yes, according to Realtor Magazine, "Housing Experts Say Real Estate is Recovering". The magazine states that some of the nation's leading economists believe the housing market has turned and better days are about to arrive.
They claim that jobs are on the increase. They believe credit is improving. And they believe that affordable homes will overcome impediments such as rising interest rates and the elimination of the Federal stimulus program.
Who are these rah-rah gurus? Why, none other than Dean Maki, Chief Economist for Barclays Capital. And Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College. Even Bruce Kasman, Chief Economist at JP Morgan Chase was quoted in the article as saying, "The underlying trend is turning positive."
Somebody ought to take these three guys to a meeting of local real estate agents in Tampa Bay and let us inform them that there is no such thing as a national real estate market for them to spout off about. The only market that matters is the one in which the property you own is located. And since you can't move the house to a better part of the country, you better take into consideration all the bad stuff that might be happening where you live.
If you happen to be in Tampa Bay, you have unemployment hovering around 13 percent. You have prices continuing to fall by about 11 percent annually according to Mr. Case's latest price index report on this area. You have mortgage interest rates that are projected to jump by at least a point over the next few months that a chief economist from JP Morgan Chase ought to know about. You have builders who have just finished 2009 with the worst year on record and have projected an even poorer year for 2010. And locally we have something in the neighborhood of half our sales being either short sales or foreclosures. In addition to all that, we have about a 14 month supply of single family home inventory in the MLS right now, and heaven only knows how much ghost inventory is floating around in Hillsborough, Pinellas and Pasco Counties.
So, from where I sit, if this is a real estate recovery it looks pretty lame to me. But then, I'm just a local real estate agent. What do I know?
Here's the point of all this: The "underlying numbers" that economists are always talking about only matter when they are the numbers you have to deal with in your local market. There is no national real estate scene. And you guys ought to know it.
-30-
posted by Terry Ward at 11:07 AM
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