The U.S. housing market has been a structural impediment to economic growth since the price collapse started in 2006. Recently, a number of price indices, sales reports and anecdotal stories are pointing to an apparent housing recovery in 2012. This may or may not be a boon to the broader economy, but what does it mean for local markets?
Finding Analysis And Data
Too many homeowners and renters make the mistake of looking to national data to understand their local housing market. National data are averages of local data. They are measures of the country as a whole. Any relevance to local markets is swamped by the sheer preponderance of data.
A good place to start for local data is home sales inventories. Inventory is the number of homes available for sale or waiting to be put on the market. High inventory means a slow market, while low inventory means a competitive market. Home prices have an inverse relationship to home inventories: when inventories rise, prices fall. Market participants can use inventory data to estimate when to put their house on the market.
Plenty of resources about local prices can be found on the Internet. Websites such as Trulia and Zillow list data about multiple aspects of home buying. Potential buyers can search based on size, price, amenities and location. Trulia has an innovative “heat map” that shows prices by state and locale across the country. The Internet is one of the top sources for information about local housing markets.
Residential property is subject to supply and demand like any other market. Local economic conditions can provide clues why inventories are so high and prices are so low. Consider the Bakken oil boom in North Dakota. Jobs are so plentiful people are coming from across the country to find employment. Home prices are skyrocketing because inventories are almost down to nothing due to strong demand.
Talk To Realtors
Finally, perhaps the best source of information about local housing markets is local realtor companies and agents. Their job is to pay attention to local conditions so they can sell homes to customers. The Internet may be a great source of data, but only boots on the ground can tell customers how things are to an absolute certainty. Real estate agents can provide that certainty. Trends and dynamics only visible to the naked eye can disappear in aggregated statistical data.
Peter Wendt is a writer/researcher who spent many years in Houston, TX before moving to Austin. If you’re planning to move in Houston, Wendt recommends you enlist a real estate agent in Houston to save time and money during your housing search.