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National Real Estate Trends vs. the Local Housing Market

National Trends: What Do These Mean?

The Value of Your Home

The national real estate market gets a lot of press, reflecting as it does a general trend that affects homeowners across the country. Real estate news agencies such as DataQuick and the Real Estate Journal, as well as industry sources such as the National Association of Realtors (NAR) and the National Association of Home Builders (NAHB), provide a steady stream of reports taking the temperature of the market. They report whether overall sales are up, down or steady, and analyze these trends on a year-by-year, month-by-month, or even week-by-week basis. They also look at specific market sectors, such as the trend towards buying vacation homes or rental properties, and track the average amount of time properties spend on the market before they sell.

It is important for buyers and sellers alike to keep up with national market trends. Although these trends are general, they nevertheless have the power to affect the mood of individual buyers and sellers everywhere. When the market gets hot in New York, Chicago, and Los Angeles, this excitement can spread and have a trickle-down effect even on small towns in Nevada and West Virginia. A buoyant market, full of enthusiastic buyers, can be a boon to sellers everywhere. Conversely, a down market can shake buyer confidence, and make sellers nervous no matter where they may live. This is why it's also important for both buyers and sellers to get a "reality check" by checking back in with local market conditions.

The Local Housing Market: What Matters Most to You

The local market rules in the area where you are trying to buy or sell, and there many, many "micro-markets" all over the country where prices and sales trends may very widely. Take the following two examples:

  • In Washington, DC, the average sales price for a single-family residence was $550,141 in December 2007.
  • In Baltimore, the average sales price for a single-family residence was $177,397 (about 70% less) at the same time.

So what would this mean to a buyer in the DC area? Well, it would mean that you may want to take into account the benefits of a longer commute (Baltimore is just 40 miles north of Washington, and there is a commuter rail line linking the two cities) vs. the significant savings. And what if you are a seller in the Baltimore area? You may wish to consider marketing your property in DC-area publications, since a Baltimore asking price will definitely get noticed in the higher-priced market.

The Baltimore/DC metropolitan areas are hardly the only two such contrasting markets in the nation. Such comparisons are likely to remain relevant whether the national market is up or down at the time, since prices will rise and fall proportionately. No matter where you live, it's therefore key to research not only the national market, but also your own local market and market conditions in surrounding areas.

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