How to spot a recovery in your town
The metro market
Your fortune is tied to the health of your city's economy. To begin to understand the city's health, check quarterly to see if your town has made the National Association of Home Builders' Improving Markets Index, which assesses six months' worth of housing permits, jobs and house prices.
Here are several key indicators of your city's health:
"The first thing I would look for is employment," Crowe says. Look for unemployment to drop and jobs to grow. Check:
- The Bureau of Labor Statistics. See monthly updates of unemployment rates for larger cities in each state (Look at Table 1 and Table 3). See trends by comparing current numbers with previous ones.
- Local newspaper business section. Calabria advises reading the paper for monthly reports on unemployment, companies hiring, plant openings, job losses, business closures and large layoffs.
- Job listings. Get a sense of local hiring by scanning Craigslist, Monster.com or other job websites. Compare your city with others of similar size where you know the economy to be prospering or flailing.
2. Home prices
- Stability. Watch for prices to stop falling and stay level or grow slowly, signs that "the market is curing and people will be back," Dienhart says. "But you don't want to see prices roaring off" and making homes unaffordable.
- Losses. Home values peaked in 2006 or 2007, depending on your area. Big price declines — 30% or more from the peak — are a warning to buyers: You may see a huge discount, but the underwater factor is huge for neighbors who bought during the boom. If their foreclosures keep flooding the market, the value of your purchase could fall or stay flat.
- Hanley Wood Housing Intelligence Pro. Get one free monthly report (coupon code HIP2012) showing changes in local home sales, prices, mortgage financing and other data. (Subscription: $100.)
- Federal Housing Finance Agency's Monthly House Price Index includes nearly every U.S. sale and refinance. Click "City HPI Summary" to see price changes by quarter, year and five years, plus rankings for each of 306 U.S. cities. Reports (see schedule) lag by two months.
- S&P/Case-Shiller Home Price Index. Released the last Tuesday of each month, this report has price changes in 20 major U.S. cities, with a two-month lag. Scroll down to "Index Announcements" to read the most recent news release, with a table showing price changes by city.
3. New homes
Developer activity is a clue to your city's economic health:
- Ads. See new-home communities in your paper's Sunday real-estate section or try sites such as NewHomeListings.com and NewHomeGuide.com.
- Developments. A dirt lot with no sales office is a bad sign. A crowded open house with interested buyers is good. Chat with salespeople. Do they seem optimistic or merely desperate?
- Construction data. The Census Bureau offers monthly updates of building-permit data by metro area. You can also track new residential construction. The NAHB issues reports on employment, home sales and building permits by metro area.
- Look around. "Do you see trucks with lumber on them? Construction crews going to work in the morning?" Crowe says.
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4. Vacancies, foreclosures, rental demand
Vacancy rates reveal market demand. Foreclosure trends give a peek at the supply of homes down the road. High rental demand may indicate a strong local economy.
- Census.gov posts quarterly homeowner vacancy rates in the 75 largest cities about a month after the quarter ends. Compare your city to others in Table 5 (Excel spreadsheet).
- RealtyTrac tools. See if your state uses judicial or administrative foreclosure procedures. If your state has an administrative process, "it's likely the worst is behind you," Calabria says. "Many judicial foreclosure states (where courts review foreclosures) still have some way to go." See foreclosures and bank-owned properties for sale, recently sold and auctioned and sort by home size, price and stage in the foreclosure process at the ZIP code level at RealtyTrac.com (free registration required). Details on individual homes — foreclosure status, amount owed, scheduled auction, lender and owner information — are free for seven days; membership is $50 a month. Foreclosure activity in your neighborhood helps tell you whether to stay or sell, Blomquist says.
- Rental demand. At Census.gov, select Table 4 (Excel spreadsheet), which includes vacancy rates for the 75 largest metro areas. New reports are posted about a month after each quarter's end.
The worst housing market in history out here in rural Nv. You'd think by the asking prices for homes on the market you were in Silicon Valley.
In six months after the real estate boom my property appraised for twice what I paid for it.
Six years later it went down to where it was before the boom.
Some are still clinging to the hope that they can sell at boom prices. They're just not under water, they are run aground at the bottom of the sea
The market won't change until sellers get realistic. Market forces work both ways despite what we might wish otherwise.
gettinitagain I agree, the appraiser is so worth the money, good advise. I think the housing market will keep falling until Dec, then when it picks up people who dumped property might be asking themselves, "why?"
Seems odd, 2006, three pages of homes for sale in newspaper, 2012, three pages of sheriff sales in newspaper. The more propaganda published the worst it looks. I see the ads in the paper for houses for sale, half a page once a week, now they have jacked up the asking price thirty percent. Kinda stuck myself too, but I wouldn't buy a house these days for more than 40 percent of the listed price.
Used to have families living in all houses on our street...
Now have two empty from foreclosures, and two empty and up for rent..?
Housing Don't look better here, Looks worst..
Also have two houses where they have been laid off from work during the last month...?
.I do not feel it was a well thought out plan...it is based on multiple add-ons to those that must 'pay the freight'. For many Americans...., My home is for sale and like many Americans this market has destroyed the 'dream of equity" a home once provided. In Obama care homes sold after 1/13 will be taxed an additional 3% at the sale. That tax is to support Obama-Mans health care. Where are the taxes on the Rich ??? I paid every mortgage bill, every tax increase and now when we need the money most heading for our retirement I must subsidize this F(*&)%$ ING mess. The real kick in the azz is that the same bassturds that pushed this through, voted to exempt themselves and have a lavish medical plan paid for by the rest of the nation.....If it was for the good, why didn't they get on the bandwagon as well...