I was featured on REALTOR.com® again – they posted a blog I wrote called “Location and Economics are Keys to Stabilization.”
Go read the full post, but the gist was this: Reviewing the S&P/Case-Shiller home price indexes which were released on Tuesday, home prices fluctuated greatly from metro area to metro area. Why is this? Is the housing market completely reliant on the number one rule in real estate: location, location, location? Well, yes, partly. That and economics.
In the blog, I looked at the metro area that I’m most familiar with – Phoenix – and two other metros that are frequently compared to Phoenix: Las Vegas and Miami. Home values soared in all three cities during the early part of the last decade, then plummeted in the last few years. All three have struggled with high foreclosure rates.
Yet – according to the Case-Shiller numbers released this week – year-over-year statistics have home prices rising 7.2 percent in Phoenix, with a modest increase of 1.2 percent in Miami and a decrease of 6.5 percent in Las Vegas. Why the big difference in three metros that are otherwise so similar?
I go into the reasoning in the blog but essentially it’s because Phoenix has a healthier job market and lower unemployment. Jobs equal growth. Jobs equal a healthier market. Yes, location is important in the real estate market but also is the economics in that region.
Write in your own questions and stay tuned as I explore short sales and foreclosures more costly next month.
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