The sky is falling, the sky is falling!! Or is it?

About 6 years ago, I started to pay much more attention to the Case Shiller Home Price Indices.  Something was going on in the local real estate market and it was unclear what it was.

As most of you read this, you have probably already subliminally heard at some point throughout the day that the home prices have fallen...again....  If you have had the radio on, or the news this morning, you may have heard it, but may not have paid attention to it.  

The Case Shiller report is a compilation of home sales data covering 20 cities across the U.S. and is produced monthly.  It is released on the last Tuesday of the month and is created by using data that ended 2 months prior.  More on the Index here.  http://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index  Meaning that today's Case Shiller report is based on the data for the housing sales that ended in December 2011.  This means that we all get an overview of what happened in the home sales arena in 2011...like we didn't already know...

But something that needs to be kept in perspective is that the report is based on 20 cities averages across the country.  20 cities!  This is to the housing market what the Dow Jones Industrial Average is to the stock market. It is a snapshot of 30 companies and what is happening with their values.  And that is all that it is...it is an average.  It does provide some insight as to what is happening on a "big picture" scale, but doesn't provide accurate analysis on all companies.  Stated differently, if the Dow Jones is down 200 points, it doesn't mean that all companies have lost value that day.

Robert Shiller was on Fox Business this morning and had some interesting things to say.  And feels that the best thing to have a recovery in the housing market is to have an improvement in the job market.  Bravo, Mr. Shiller, Bravo!!  http://video.foxbusiness.com/v/1478831038001/shiller-could-be-housing-downtrend-for-5-10-more-years/?playlist_id=87247 

The same is true about the housing market.  Just because the Case Shiller Index showed a drop for the year end in 2011, it can not indicate that all cities have declined.  And even if a city has had a decline, there are going to be pockets that are not going to follow the trend line within the city and can vary wildly.  Townhomes vs. Single Family or low end vs. high end.  Neighborhoods within a city can even differ greatly.  

Every so often, the Dow  Jones Industrial Average occasionally will "delist" a company that they no longer feel is relevant to the financial world.  And in my opinion, there should either be an increase in the cities contained in the Case Shiller Index, or there should be some that are delisted.  Just like their stock market cousins, they are no longer relevant in the overview of the housing market.  Eastman Kodak was a "Blue Chip" company for 74 years before it was delisted in 2004.  When that occurs to a company...the future is not looking bright for the employees, or the stockholders of it.  Cities are the same way unfortunately....

There are cities that are not included in the Case Shiller list that ought to be included.  Cities like Anchorage, AK should be one of them.  The real estate market here is stable and didn't go through the wild gyrations that others experienced.  It also has a progressive plan for the future over the next 20 years and as such, would provide a "ray of sunshine" in an otherwise very depressing report from Case Shiller.

Kind of thought that this would be a good day to shed some light on that subject.  Hope that it helps!

Have a good Leap Day tomorrow!

Greg

  

Which Remodeling Projects Pay Off the Most?

This is one of the most commonly asked questions that I get this time of year when homeowners contemplate which home improvement projects they are thinking of tackling.  

If you are interested in knowing which ones are best, drop a note or give a call and we can discuss it in detail as the answer(s) might surprise you.  Keep in mind that there is a big difference between making your home more "salable" and making it more "valuable".  The best way is to spend some time together at your home so that we can, together, decide which items make the most sense given the competitive market that you will be in should you decide to list your home.

The spring listing season has rapidly come upon us, and the buyers seem to have more of a sense of urgency this year than they have in years...that is not to imply that we are at the "silliness" level that was experienced 5-8 years ago.  With that said, it is more important than ever to prepare a carefully thought out plan as to what should be done to attract buyers to your home over the others that are currently for sale.  The winners in the market today understand that in order to "win" that it is part "beauty contest" and part "pricing war".  As the local real estate market recovers, inventory levels will drop with an appreciatory period slightly behind.  In my opinion, that is where we are right now.

Something that I am also monitoring is the ratio of renters to owners, and why there is such a high level of renters right now.  It would appear that many of the current renters are doing so as a result of a blip in their credit, and are now waiting for their past situation to clear allowing them to then enter back into the market as homeowners.  Based on extensive research, it appears that we should be coming into a period where many of them will be able to buy again as well.  This will only add to the pressure on existing inventories and accelerate the time frame to the aforementioned appreciatory period that is expected.  Barring any unexpected change in the world markets, I think that we are closer to the end of the "buyers" market in Alaska than what is currently being reported on a National level.  Here is a story from the National Association of REALTORS that illustrates that point.  http://www.realtor.org/press_room/news_releases/2012/01/phs_dec

I will continue to monitor all of the factors that have a bearing on the local real estate market so that when the need arises, be able to provide a superior level of counsel so that you can make an informed, educated decision based on that research.

With the amount of snow that we have received in the Mat-Su Valley, the moose have been forced out of their normal wintering grounds and are out in record numbers by the roads.  The amount of car-moose hits has already surpassed last year's year end count as a result.

Until next time...watch out for moose along the road and drive safe!

Greg