Is there a national real estate market?

Most media reports about the housing market focus on national statistics such as sales volume and median home prices. The often-repeated statement that all real estate is local is often repeated because it’s true. It’s interesting to hear about the ups-and-downs of the U.S. real estate market, but those reports really are only useful in the context of local real estate markets.

 

In reality, the national real estate market is made up of thousands of local neighborhoods, each with its own unique circumstances. The local economy, employment picture, tax situation and government policies will have more influence on local housing markets than any national trends. That’s why homes in some neighborhoods continue to sell for the asking price, while across town others languish on the market despite multiple price cuts.

 

The difference might be better schools, an exclusive location or just a neighborhood with a prestigious name. Even within the same neighborhood, Victorian-style homes may be selling well, while Colonial models sit unsold. A condo with a striking skyline view will sell better than an identical unit facing a parking lot and a dumpster. That condo doesn’t have much impact on the national real estate market – and vice versa.