Studying today’s housing market is sort of like looking at an online map. Click the plus symbol, and you’ll zero in on all sorts of details you didn’t see before. Click the minus button, and you’ll notice that those details disappear in the context of a whole continent. It’s not that the picture being presented isn’t accurate, but what you see depends on your perspective. The trouble comes when you try to make a street-level decision using what you learned from looking at a continent-wide map. So before you make any moves based on the last thing you read about real estate, take a minute to step back, and read these 7 truths about the housing market.
1. Nationally, the housing market looks bad…
There’s no denying this statistic: The median price of existing homes in the U.S. dropped to $207,000 in 2007 from $221,600 in 2006. That’s unprecedented.
2. ….but your neighborhood may be sitting pretty.
You’d be hard pressed to find a market that remains red hot, but many are at least stable, with median prices that are holding steady. A REALTOR® can be your best source for local-level information.
3. Housing is cyclical.
Just like our overall economy, the housing market goes through peaks and valleys, good times and bad. Statistics show that housing prices generally have risen steadily over the last four decades. If you buy for the long haul, rather than to turn a quick profit, you can generally be more confident in your real estate investment.
4. No one can predict the market bottom.
Estimates of when housing prices will hit their low point vary widely from economist to economist. We won’t know when the market has hit bottom until after it starts to head upward again.
5. It’s not necessarily a terrible time to sell…
…especially if you are also buying a new house. You might not get the price you would have at the peak of the market for your current house, but you’ll probably get a much better price on the house you’re buying than you would have several months ago. You might be selling low, but you’ll be buying low too. Again, a REALTOR® can help you make the right decision for you.
6. Foreclosures are a small percentage of housing, in most markets.
Foreclosures seem to be concentrated in certain states, such as Nevada, where one of every 54 households received a foreclosure notice in the first quarter of 2008 and cities, such as Stockton, California, where the foreclosure notice rate was one in 30. In Vermont, however, the foreclosure notice rate was less than one in 103,000.
7. You can still get a loan
It won’t be as easy as it was in 2007, but for borrowers with decent credit and steady income, loans at historically low interest rates are available.
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