What’s Really Going on in the Real Estate Market?

I’m an avid newspaper reader. And I mean old school: I can’t get my morning started without reading the paper…in paper form.

And these days, whether you’re reading the papers, watching the news, or surfing the web, you’ll no doubt come across a story about the state of the real estate market. Housing starts up? Re-sales down? Average sales price versus last month, or last year? It’s all so confusing, and you don’t know who or what to believe.

As you take in these different statistics, keep in mind that real estate is extremely area-specific. What you hear about the national statistics may not hold true at all for Atlanta, and even more specifically, what you hear about Atlanta statistics may not hold true for your specific area or property. Of course, there are trends in the market, both locally and nationally, but it’s really important to dig a little deeper to get the true picture.

I have found that the variation in market trends applies not only geographically, but also by property type. For instance, in Atlanta the single-family housing market is generally performing better than the condominium market. This is mostly due to the huge inventory of condos available, but also to the fact that single family homes are now affordable to many folks who would previously have only considered a condo purchase. Again – remember that this is still a generalization, and doesn’t apply to every condo complex or every area of single family homes.

What about new construction? What do they mean by “housing starts”? Well, housing starts refer to the number of permits issued for new construction homes. In today’s real estate market, fluctuation of these numbers can be a double-edged sword. If housing starts are down, there is less inventory, and therefore less competition for the homes currently on the market, which would be a good thing.

However, it also means that there are fewer jobs in the construction industry, which can negatively affect the number of eligible home buyers. Obviously, the converse is true of housing starts going up. This too can be area-specific. In the outer suburbs where there is more new construction, an increase in housing starts has more of a negative impact on the market than in intown neighborhoods, where land, and therefore new construction, is scarcer. (It’s a hotter commodity.)

So, who or what should we believe? While it’s important and informative to read about the big picture, if you really want to know about the market trend for a specific area or type of property, it’s best to consult your local Realtor. They have a direct connection to what is selling or not selling, as well as the pricing and on-the-market time for your specific property.