One way to understand what is happening in the real estate market is to examine the percentage of homes put on the market that fail to sell. It is also important to look at the actual number of homes that sell in an area and how that is changing from year to year.
While most news reports focus solely on if sale prices are going up or down, let me express a word of caution when listening to these reports.
First, real estate trends are local. And when I say local, I don't mean citywide. There can be vast differences in how easily homes sell in one zip code compared to another. In some cases, there can even be subdivisions which are strong while neighboring subdivisions are struggling.
Second, an increase in the average or median sale price doesn't mean your home's value just went up. It could mean that buyers are feeling more optimistic and more are willing to buy in higher price ranges than in the prior year. It could mean that a new construction subdivision started sell homes that are more expensive than nearby existing homes, and since they weren't available the year before, the average price is bound to go up.
Or it could mean that your house value went up.
Real Estate is Local:
Gauging the local real estate market by listening to national reports would be similar to checking the weather by listening to a national weather report.
While a national weather report will certainly let you know if it is winter or summer, it won't tell you if it is raining in your backyard.
The same is true for real estate.
The national real estate reports will certainly tell you if the market is struggling or hot, but the local differences vary widely just as winter temperatures in Texas are very different than those in Maine.
Real estate differences can be found even within a single city. While some municipalities will struggle, others can see strong sales. Single family homes often are selling at different rates than condos.
To understand how YOUR home's value is doing, you need to have a personal analysis of your property. If you are contemplating moving and want to know the value of your home, contact me for a no obligation free personal housing analysis.
For more information on this subject, see my blog post published yesterday on Arch City Homes.
For more information, contact Karen Goodman (email@example.com or 314-677-6538).