Does anyone really know what is happening?

As a Real Estate Broker, I believe it is my job to keep track of the industry, try to make some sense of it and inform my agents and clients what is happening locally.

One way I do this is by keeping tract of Real Estate reports. I have over a hundred news feeds I scan through every day. Looking at each headline today, something really stands out....Confusion!

Let's take a look at a few headlines that cam in this morning:

• Mortgage Rates edge up
• Some see hints of a bottom
• Sales of new homes sink.
• Lennar readies for New Home surge
• US Real Estate Confidence drops

Each headline seem to contradict the next. SO what is happening...Uncertanity!

We have always had a saying in Real Estate, It's Local. And that is what we are seeing here. When we try to take a local market and spread it out nationwide, it gets confusing and people are seeing mixed signals. See, the National News reporters can not possibly see and watch all the Local Markets so what they do is take a few areas of the country and use that as a sample of what is happening.

Reporter "A" might use the S&P/Case, Schiller Index and Reporter "B" uses the Office of Housing Enterprise Oversight Index. Now one may think that these tow indexes would be similar, but that can not be any farther from the truth. Take a look at these tables.  

 Figure 1 – Chart of quarterly OFHEO regular home price index (top chart) data and year-over-year rate of change (lower chart). This index did not peak until Q2-2007 and the year-over-year chart shows prices still rising. Data - OFHEO

  


Figure 2 – Monthly S&P Case-Shiller home price index data showing a peak in July 2006, a full year before the regular OFHEO HPI. As we see here, the CS HPI shows prices beginning to drop in January 2007 while the OFHEO HPI would have us believe that prices are still rising. Data- S&P Case-Shiller.

So we can clearly see that there is, was and will continue to be a lot of confusion in the real estate market when we attempt to take 20 markets across the country and use them to represent what is truly happening in Your Neighborhood. Of course, the "Experts" need to do this as it would be nearly impossible to track every single Local Market, but there is something Home Buyers and Home Sellers can do...Turn to a Local Expert!

Every Real Estate market across the country is filled with hundreds if not thousands of Real Estate agents or REALTORS (there is a difference, but thats for another time) However, there only a few Experts in each market. So if you are one to want to know what is truly happening in Your Market, find a Local Expert to work with and forget the National Headlines.

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