Running the Real Estate numbers

Trying to explain the current economy and housing market is less than glorious for  even a seasoned agent.  Each person has experienced the market in a different way,depending on where you live. For better or worse during such chaotic times consumers tend to pay attention to daily numbers- not the BIG picture that may be developing.

  Real estate appraisers can sometimes give us an look inside the trends. Real estate appraisers  often watch indices which for residential prices are at best a double edged sword.  In terms of applications these indices are not always helpful, but appraisers can’t ignore the macro numbers, so they consider the macro data too, because that may be what people can understand or look at- the assessors, the lender for example.  Appraisers  go from general to specific information , what affects value?  Adding in  a market analysis you will get data such as MLS sales , median price, local trends, economic national data.  The appraisal industry is becoming more and more DATA driven this directly affects your value too.(automated valuations)  Home prices are turning into statistics, but price indice  models vary  because of inconsistancies.  Home prices  are interpreted differently using different methodology. Some snapshots are of current home prices, while others are matched pair repeat sales, a much longer term  measurement. Renovations, additions, acreage may not get included- ohps there goes your money down the drain!  A Good indice to understand for example is  CoreLogic, ( it analyzes all combined data through estimates, then removes distressed  sales; Good news, they show the” all”  indices are still distressed, but the” excluded” price declines, are increasingly isolated to only the distressed sales, mostly in the form of REO and foreclosures.  Only about 8-9 %  of  loans are now delinquent mortgages, and only a fraction of these will be foreclosed.

 Right now we are dealing with reality versus perception. An important factor to consider when trying to understand the housing  market is to  recognize the valid statistics and, well, all the other STUFF.