When will YOUR housing market recover? |
| By Marcie Geffner • Bankrate.com |
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Pundits love to make predictions as to when home prices will stabilize in U.S. housing markets. But even
well-respected forecasters and analysts may disagree, and even if a forecast proves true nationally, your local market may
behave in a wildly different way. This disconnect between broad-stroke forecasts and small-scale local markets presents quite
a puzzle for homebuyers and home sellers, who need to make major financial decisions on the basis of facts, not fiction.
Two examples nicely illustrate the divergent opinions of respected economists, some of whom suggest a housing
rebound is just around the corner and others of whom say a recovery could take years just to get started.
Lawrence Yun, chief economist for the National Association of Realtors, expects a "soft" first half
of this year for housing and the economy and then "notable improvement" in the second half of the year. But U.S. Treasury
Secretary Henry M. Paulson Jr. notes in a recent speech that "most forecasters expect a prolonged period of adjustment"
in housing.
Who's right? In the long run, both comments may prove prescient because the national housing market is more than
large enough to encompass a wide variety of trends in different places and on different timelines. And that means, at the end of
the day, you'll need to rely on your own best judgment to make decisions for yourself and your family.
Local data may be more meaningful for homebuyers, sellers
So how can you figure out when home prices and sales hit bottom and begin to recover in your neighborhood? You may need to do your
own research to find the answer. Dig up facts and figures about your own city or town and then combine that data with information
about national trends to formulate your own conclusions.
Plenty of data are as close as your keyboard, though the process of sifting through it may take quite a lot of time
and thoughtful analysis. If you're tempted to skip out on what may seem like a burdensome homework assignment and instead rely on
your own gut instincts, you might want to take a tip from Stuart Gabriel, director of UCLA's Ziman Center for Real Estate in Los
Angeles. He says, "some investors are very instinctual and this has worked out well for them, but most of us rely on
the acquisition of information."
Get your data straight from the original source
For starters, here's an overview of some of the data and the organizations and agencies that collect and
disseminate it:
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| Check these organizations for housing data |
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Supply of for-sale homes a key indicator
If you don't want to indulge in that much research, zero in on the most important statistic, which, Gabriel suggests, may be
the supply, or "inventory," of homes that are for sale in your local area.
"There is a whole litany (of factors that affect housing) -- home sales, housing starts, building permits, house
prices -- and all of those are important indicators," he says, "but the inventory numbers in particular are really important."
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