The news today coming from the Case Shiller index is dismal as their top 20 metro areas dropped 14.1 percent and the top 10 metro areas fell 15 percent in March from the previous year.
The numbers are rough folks, but going into the spring season the perspective on potential buyers may be even worse. We have long talked about the crowd psychology affecting purchases and this news will most likely make every buyer pause.
And the news is big, look at the Drudge Report from this morning.
Since most media people read Drudge expect this story to have legs and lead on a very slow news day across the evening news shows and tomorrows papers.
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Please consider another thought. While I'm no doubt biased as a market research company CEO – there are several critical things that are NOT being said by most of the media in relation to this story today.
Price / valuation corrections are necessary and a normal part of the real estate market cycle – we’ve yet to see, read, or hear significant effort devoted to explaining that simple but vital fact. Without price / valuation corrections there can / will be no recovery. Rationale affordability must be restored for markets to start moving again.
Secondly, there are many more markets than the two mentioned by the Case Shiller team that have escaped the loss of value making headlines today. One must research the field carefully to find values these days, but there are markets that have sound single and multifamily values at present.
A bit more understanding and discussion of the fundamentals – such as the real estate market cycle and the issue of reasonable housing affordability – would certainly seem to ease the pain. We have a review of market cycle fundamentals posted on our website – it's free and a good, short reminder of a key fundamental many are overlooking today.
Excellent points Mark, thanks for the feedback.
That can't happen! Real estate NEVER goes down!