Price-A Key

Introduction
This is the second of three articles discussing how NAR data can be used by Realtors® in conjunction with local market data to provide the buyer with an overall improved understanding of the housing markets. Again, the national news focuses on housing problems. Comparing the national numbers with local numbers should give the potential buyer an improved understanding of the housing market and how the local expert—the Realtor® –can provide the understanding to move forward to take advantage of today’s prices and low interest rates. As said before, taking a tip from Dragnet’s Joe Friday, “All we want are the facts…..,” NAR’s Existing Home Sales (EHS) statistics can show the facts over an extended time period.

Home Prices—No Crystal Ball, But a Reasonable Approach
Potential buyers are well aware that median existing home sales prices have declined substantially at the national level and appear to fluctuate. There is frequently a lot of concern over whether it is “safe” to buy.

Prices Have In Fact Declined

On a 12 month rolling basis the decline in median price appears to have leveled off substantially.

Month-by-month data are important, but trends over an extended time period are helpful in providing a perspective on where the market is going. Data at the national level are in the news—but the most relevant data for the potential buyer needs to focus on local price data along with the national information about which the media are fixated. A comparison of local and national price trends should help to put the overall market in perspective.

What Does This Mean To Realtors®?
Again, all real estate is local. That is why a juxtaposition of local numbers—sales, inventories, prices—with national numbers can build confidence in where the market is headed—whether up or down. Both monthly and 12 month rolling data are relevant. In addition to the sales and price data available at http://www.realtor.org/research/research/ehsdata, the information in NAR’s Realtors Confidence Index presents information on Realtor® opinions about the market outlook. Finally, NAR’s Profile of Home Buyers and Sellers notes that home owners generally live in a home for 7 to 9 years, suggesting that a day-to-day focus on price is inappropriate. In addition, a home provides a distinctly different lifestyle from an apartment, as outlined in these two articles: Home Ownership Matters: Home Ownership and Sense of Control and Home Ownership Matters: Home Ownership and Civic Engagement. These are considerations worth buyer attention—some of the advantages of being a homeowners.