Are you trying to time the market in order to make the smartest real estate move? We all wish we had a ringing bell to alert us of the perfect time to buy or sell a home, but even industry experts disagree about the condition of the current market and when a given real estate cycle begins or ends. For instance, during the first quarter of 2008, the S&P/Case-Shiller Index reported that their 20-city composite saw a 12.7% year-over-year decline, which the OFHEO (Office of Federal Housing Enterprise Oversight) reported that national prices were up 0.6%. Meanwhile, NAR (National Association of Realtors®) marked an annual decline of less than 1%.  Why the discrepancies? First, how each of these bodies evaluates numbers is vastly different. The Case-Shiller Index only accounts for numbers in 20 metropolitan service areas, excluding many markets that consistently show home appreciation. In addition, Case-Shiller only counts repeat sales of the same house and doesn’t include condominium and new construction sales, which can drastically affect home appreciation in a specific community. In contrast to national numbers quoted by the Case-Shiller Index, Oregon, Washington, and Idaho multiple listing services look at all home sales, including condominiums and new construction, for its reports. In the meantime, none of these national experts can tell you exactly what’s happening in your local community. A report on the Pacific Northwest housing market by OFHEO found that home in Washington and Oregon appreciated 64% while homes in Idaho were up 60% the past five years. And as you can see from the graph below, home values here in the Pacific Northwest had year-over-year increases while the national data aggregators showed decreases from 3-14 percent year over year. The statistics quoted in the media don’t offer much help in terms of understanding the current value of a single home. When the median price increases, this can reflect higher overall home values. Or, it can simply mean that more expensive than inexpensive homes sold during a period. A decrease in the median price usually indicates that more inexpensive than expensive homes sold during that period. Many foreclosure properties are in the lower price ranges. In areas where the median sales price is declining dramatically, a higher volume of lower-price foreclosure sales could be a contributing factor When it comes to timing the market, make sure you have all of the facts before making a guess. There is no ringing bell, but there is plenty of accurate information to be had…if you know where to look. Download the full report for the Pacific Northwest here or view our market-specific snapshots for a timely look at specific trends in King County, Pierce County, Snohomish County, Kitsap County, Spokane County, Clark County, and the Portland Metro area. |