All Real Estate is local, right?
Since that’s the case, there are encouraging signs in Real Estate. In my most recent post, we learned that the number of sales in our area is rather consistent, going back through the 12 years I’ve been tracking the data.
In another post, we learned from the statistics tracked by the Ann Arbor Area Board of Realtors that the number of homes where the sellers have accepted a sales agreement increased from 55 in October, 2006 to 71 in October, 2007. This is a good omen for the future.
Now, we read in the Wall Street Journal that construction of new homes rose 3% from September -- the first monthly gain since June.
Going back to my original premise, that all Real Estate is local, it’s helpful to understand our recent history.
Back in 2003 and 2004, our Real Estate market locally was rolling along just fine. The chart of listings and sales posted earlier shows that in 2004, the number of homes listed for sale began to increase substantially. At the same time, in the rest of the country, the overall real estate market was sluggish, at best. So our local market began its decline in 2004 – three years ago. During 2004 and 2005, the real estate market in major areas (Florida, Arizona, Nevada) began to “boom” (at least, until the hurricanes hit Florida).
Beginning in 2007, the national media began to report concerns over the national real estate market – mostly due to problems in the mortgage market. In some of the major markets (Phoenix, Las Vegas), investors who bought pre-construction homes (as an investment) are now losing their own homes through foreclosures. Meanwhile, our local market continued to languish.
Perhaps our local real estate market is about 3 years out of phase with the national real estate market. If that’s the case, perhaps we have hit the low point of our local market, and things will pick up in 2008. We shall see!