Whether you own a home or lease home, want to sell a home or buy a home, the most important thing that you can do is to educate yourself on what is going in the current real estate market. A comprehensive housing report for your local area is more critical today than it has ever been in the past.
There are changes coming that can be clearly seen if you are looking at the correct information. Housing markets do not move so quickly, so recognizing change trends might be easier than doing the same type of analysis in the stock market.
A Comprehensive Housing Report Starts With Supply And Demand
Nothing gives you a better indication on the current state of the real estate market than a summary of supply and demand. Ideally, this summary should be broken-down by areas and price ranges so consumers know if a price range is hot or stale, is limited or glutted with product.
In the real estate chart on the right, we see supply and demand information for the Tallahassee housing market, indicating a glut situation where relative home supply is averaging more than 12 months of supply.
Four Key Trends Provide Comprehensive Housing Report
We track the one-year (non-seasonal) trend of new listings, new pending home sales, new closed home sales, and new failures in order to get a feel of the movement and activity in the market. In the image on the right, we see the number of new listings each day is falling while the number of sales is rising, which together mean we are consuming inventory in a better manner than we were in the recent past.
Additionally, we observe decreased failures and increased pendings, meaning we should expect more improvement in the coming months. This report is excellent for a view of what will occur in the next two or three months.
Paying Attention To Distressed Properties
Too often, we allow diminishing supplies to fool us into believing total recovery is just around the corner, but knowing how to track some of the key components of the shadow inventory is vital. One report that we cover many times per month is the home sales failures trend, because it identifies the number of properties leaving the market without selling, thus indicating a likely source for future inventory.
Another key element of the shadow inventory comes from the pool of distressed property. In the graph on the left, we see the trend of lis pendens filings is dropping, but the trend of foreclosure sales is rising. The ratio between the two is soaring, as banks are finally starting to push forward in clearing up the slew of bad loans in their inventories.
These foreclosures are now starting to enter the market, and we should be prepared for the next negative wave of the housing market recovery. Inventory levels will grow, but dropping values will lure home buyers into the market.
Best Comprehensive Housing Report
The best source of information for a comprehensive housing report can be found at The Housing Report. While information is based upon the local Tallahassee real estate market, the results parallel most housing markets in the United States, and the lessons and analysis can be applied anywhere. If you like a particular report, please do not hesitate to let us know.
Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.