Some recent media would lead readers to believe that the housing market may never recover. That people will stop desiring to own real estate in America. Prices will fall, home real estate and fall, and fall some more – intrinsic value is Zero. The end is here, now.
Media has dramatized the entire U.S. real estate market as ‘overheated’, ‘a bubble bursting’ and in a free fall. No seasoned industry participants believed that housing prices could rise at double-digit rates forever, ควยปลอม ไข่สั่น but is it a bubble bursting and destroying home equity as we know it?
Even conservative economists point out that there are only pockets of ‘froth’, people still want and need housing. Our population is growing, and more people will need more homes. In rare-air vacation markets, where appreciation has skyrocketed, Kitchens Melbourne the supply is restrained by environment and demand numbers keep growing, and not just from U.S. demand. Foreign buyers with strong and presently appreciating currencies are buying our vacation properties too, adding to the boom in these markets. A boom that has been hardly affected by the greater domestic housing market slow down.
Real estate is above all a local market, and speaking of it in broad strokes will always lead to mis-calculations and missed opportunities. Real estate appreciation has not been red-hot all across America. In fact, many mature U.S. real estate markets are soft, Buy Weed Online Europe measured in real (inflation adjusted) terms they may even have been declining in value over the last 8 years. But media has a hard time making a 0.3% home appreciation rate in the industrial Midwest news. The 28% gains in once rural or underdeveloped areas of Arizona or Florida is exciting headline news, just as the subsequent double digit declines in sales figures will make exciting news stories.
These figures mean very little to the true value of real estate. If sales volumes drop, values may or may not fall, but the news will be the same sour song, 8811 a down market. Property is a long-term investment and should not be measured by short-term headline grabbing events.
Consider the long-term macro-economic forces that have begun affecting our country’s real estate markets. Midwestern populations are migrating to sunny, Southern and Western States at increasing rates, by purchasing future primary residences. The trend is evident, but quiet, because many Northerners are maintaining two residences for the time being. But will there be a mass exodus when the bulk of boomers retire? Is the real story not the over heated markets of the south and resort/second home areas but rather the future potential implosion of values in the heart land? Is the bubble actually in the markets with low appreciation rates? Or will more people decide to stay put and never make the full-time move to the Sunbelt?
What is an appreciation rate, and who is measuring these stats? The National Association of Realtors, The Federal Home Loan Bank, Fannie Mae, and The Federal Reserve all have a role in compiling the statistics. The statistics are sound, but the interpretation of their meaning can be spun so easily. It is disturbing is the lack of economic reason that seems to enter the public debate after the official statistics are released to the media. Sales volumes may slow, but this does not mean that housing is on the decline in America, it simply means that less homes were sold compared to last quarter or last year (record years).
The media announces that a home in the Southeast rose by 14% in value, Northeast by 9%, Midwest by 4% and in the West by 13%. This would lead a $100,000 homeowner in Utah to believe he gained $13,000 while the San Franciscan gained the same amount? There is no discussion of inflation adjustments, or renovation investments, or regional job or emigrant growth, 1185 all factors that might have affected the real gain. How does such a useless statistic as ‘appreciation rate’ even find it’s way to page 12, let alone the headlines?