Perspective on the Real Estate Market
Here is a little graphic presentation that I ran across in yesterday's Wall Street Journal. It was part of a larger point the author was making about the credit markets and corporate leveraged buy-outs. I've cut the piece related to the housing market. To me, this demonstrates that things aren't as bad as one would think from listening to the radio or reading the newspapers. It's bad for those short-term arbitragers who made risky bets in the last couple of years.
For the average homeowner, in the "market" (also known as one's home) for the long-term, it's looking pretty good:
The median price graph looks like a hump with a normal correction, still trending upward, to me. This rise in median prices is national and, therefore, does not reflect the well-known axiom "all real estate is local" - and in Flagstaff, these graphs look even better. The volume of sales appears still to be slightly above 2002 -- did we think the world was ending in that market?
Sources per the Wall Street Journal: Inside Moody's Finance, Moody'sEconomy.com; National Association of Realtors; Dealogic.
(I suspect this part of the larger table came from the NAR, the most trusted source of real estate stats on the national level.)
See the whole article here: "Behind the U.S. Mortgage Mess - WSJ.Com"
For advice about the Flagstaff real estate market, or to buy your Flagstaff Home, contact: Team Heitland at RE/MAX Peak Properties
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Neat!!! Thanks for sharing!!! :=)
The Phoenix market inflated 42% in one year -- the "hottest" market in the nation. Anything that goes up that fast seems unreal, doesn't it? The fundamentals are there (in Phoenix) -- strong job market, low taxes (in spades), population growth. The problem is that the market got ahead of itself with overbuilding (in my opinion). That didn't (and can't) happen in Flagstaff because of the lack of land for development.
Joe:Phoenix prices remained lower than Flagstaff's -- as they have been for many years, but Flagstaff did not jump at the same rate as PHX, so, as you said, the gap in prices narrowed in 2004-2005. While Phoenix slowed in late 2005, Flagstaff kept going up. Then we held steady for many months and started to drop in late Spring. There was a lot of "seller resistence" to overcome here before prices could begin to drop. For the most recent year/year comparison see this post.
Flagstaff is indeed one of the less affordable areas in the country (wages/housing costs). This reflects the fact that so many homes are second homes and retirement (or semi-retirement) homes so owners are not making the living here, but enjoying life from the living they are making, or have made, elsewhere. There are some higher wage jobs, primarily in esoteric scientific fields, and for those who can "telecommute" with employers based elsewhere. No judgment implied here -- just the facts.
Given the predictions for the overall economy and the mess our government is in, your some of your words (hope for the best) are unfortunately right on target. Investors are starting to move into the market -- a la Bank of America's investment in Countrywide yesterday, which may indicate we've hit the bottom of the trough on the credit crunch, but I wouldn't say that for the overall economy.