When will YOUR housing market recover?
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. If you want or need to sell your home, how do you know the best time to put it on the market?
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, sellersSo 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 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 sourceFor starters, here's an overview of some of the data and the organizations and agencies that collect and disseminate it:
Check these organizations for housing data
Supply of for-sale homes a key indicatorIf 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."
The inventory of for-sale homes in a local area is usually measured as a number of months' supply at a current pace of sales.