Top of the morning to ya!
Looks like we here in Tennessee dodged another bullet with respect to the weather over the weekend. Thankfully, the real power of that storm to the North of us didn’t dip below the Kentucky border, so we skated through with not much more than high winds and a couple hours of flash flood conditions.
Unfortunately, there were some towns in the Midwest that found themselves in the “Perfect Storm” of violent weather as unusually warm air met with cooler air creating the perfect conditions for 60 some-odd tornadoes to wreak havoc.
Typhoons, Hurricanes, Tornadoes, Tsunamis, Earthquakes, Flooding . . . these are all perilous weather conditions we see manifesting out of thin air all over the world leaving great swaths of destruction . . . We’re relatively indefensible if we are not appropriately prepared because there’s seldom enough warning to do much more than take cover . . . or FLEE.
Interestingly, the economic and political climates affect us in very parallel ways. Often, the news reports these conditions with the same terminology as the weather channel . . . and the most oft used term that I hear as being indicative of some deep, dark, draconian event is “The Perfect Storm.”
I know . . . drama sells newspapers . . .
Daily, I see news stories about the state of the Real Estate Industry because EVERYONE is interested in what’s happening in the housing market. There’s good reason for this . . . If sales are UP, Inventory shrinks, and the building industry thrives . . . creating more jobs and moving more materials/products.
This is “Stimulating the economy” writ large.
Don’t forget, though, that Real estate is a LOCAL phenomenon . . . What you read about in the National news SOMETIMES has relevance to what’s going on in our Middle Tennessee market . . . but it’s seldom accurately descriptive or prescriptive of our conditions.
This title from the National Association of REALTORS on-line Magazine caught my eye this morning because of the catchy “Perfect Storm” title
I think it’s useful to devote this week’s Monday Morning Coffee to some clarification of what is meant by the term “Housing Affordability” . . . This article does a decent job of making this clear(er).
“Housing affordability is being negatively affected by a ‘perfect storm’ scenario,” says NAHB Chairman Rick Judson. “With markets across the country recovering, home values are strengthening at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots, and labor.”
The National Association of REALTORS(R) recently reported that housing affordability has fallen to a five-year low as home price increases have outpaced income growth. “Expected rising mortgage rates will further lower affordability in upcoming months,” says Lawrence Yun, NAR’s chief economist.
All of this aligns well with much of what I have been saying throughout 2013. Our market literally EXPLODED in October of 2012 and provided STRONG sales for nearly 10 months before showing any signs of tapering. The local associations bragged of 25%-30% increases in monthly sales over the year prior . . . something which really might not have been quite as phenomenal as one might think because the comparisons were really “apples to oranges” . . . Until October of 2013 at which point they were comparing apples to apples . . .
In my opinion, Our real estate market is more “normal” than we’ve been in 10 years.
It is true, though, that Housing Affordability is a factor. In most segments of our market, the inventory of available houses is near zero relative to prior years . . . Mortgage rates are becoming less predictably low . . . Prices have risen (especially as new construction infill construction pops out of the ground) . . . and all of this has outpaced the job market recovery (Income Growth).
I ain’t no economist. I’m just a REALTOR who understands our market like the back of my hand, and I LOVE helping folks make sense of the cacophony of real estate related news that showers all of us every day.
If you’re considering making a move (Buying or selling a house) and are frozen in your tracks because you’re not sure that NOW is the right time . . . I sincerely hope you’ll connect with me. At the very least, I can PREPARE you for whatever storms may come so you’ll not have to dive for cover . . . or worse – FLEE!
Let’s sit down over a cup of coffee and discover together what makes sense for you and your goals.
I’m a believer that NOW may very be THE “Perfect Storm” for Buying AND/OR Selling a house in Middle Tennessee.
Now . . .
I wait for your call . . .