Recently I have seen articles talking about the housing market recovery and prices relative to the 2007 highs. These articles are well and good, but we need to dig a step deeper to truly gauge the housing market recovery in our local areas.
Use Reports for Ideas and Data for Decisions
The data cited in reports sometimes surprises me because there are several ways it can be diced up.
For instance a recent report from CBS News, Who the Housing Recovery is Leaving Behind cited data from Zillow showing that home prices on the lower end of markets have not recovered to the 2007 highs in the majority of U.S. markets.
However, homes on the high end had already surpassed their 2007 peak prices.
Finding the Opportunity
As investors, seeing information in a report like this; where can we look for opportunity?
First is to look at the housing prices in your market (or elsewhere if you are willing to invest out of state) and see if this report holds true for your area.
If it does, is there an opportunity to pick up lower priced homes as potential rental properties? More so, is the price to rent ratio more favorable than the higher priced home given the slower recovery over the past decade?
Finding the Price Data for Your Market
With housing data being public record and easily accessible online now I don’t see any reason why an investor would not pull up this information themselves to verify.
Simple go to your county’s property appraiser site and search an address for a home in a neighborhood that you think fits the above criteria.
From there you can usually do a broader search on the neighborhood, sub-division, street or even zip code to see the completed sales over the past year.
Use those sales prices and then compare them to the 2007 sales prices in the same neighborhood to see if prices truly are lagging the 2007 highs or if they have fully rebounded.
The Reality in Real Estate
The reality is when I do such a search for my local county in Florida, I find that all the middle and upper end homes have reached and surpassed the 2007 prices, while the lower end are right around the 2007 peak prices.
This is somewhat contrary to what the above mentioned report is saying about my state on a whole. However, I’m looking at homes listed for sales against homes that have sold in the past six to twelve months.
Their data could very well be factoring sales at auction, etc. which would certainly bring down the median price. That data is not relevant to my investment criteria and would only skew it, thus another reason to do this easy additional research.
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