As Housing Goes………..So Goes the Economy

Over the next two weeks, I will provide a current status of the housing industry and why I think we will have an instantaneous flip-flop from a buyer’s market to a seller’s market. As I outline the case substantiating this opinion, please keep in mind your real estate goals and dreams. Without a doubt in my mind, the American Dream is having land with a home to raise your family; have a height chart on the wall; create memories associated only with your home; and establish roots in your community. Home ownership is not a stepping stone but a concrete foundation of pride, a sense of gratitude, and verification of family achievement surpassed by nothing else.

In the late 70’s and during the severe recession, the NAHB membership had a motto for the times:

“Where will our children live?

In my opinion, this question is as relevant today as it was over 30-years ago. Even with housing prices being significantly adjusted down over the past several years, my fear is that our children will miss a great opportunity to own their own home before we don’t have an answer to the question!

This map shows the average house price-to-income ratio in each state. The comparison is based on data generated over the past two decades. However, this snapshot in time will change as homes will again appreciate and the COST of homeownership will again rise. Why do some of the states currently have a high ratio? I can explain a few.

Virginia – the federal government influences the Virginia market and the housing demand-supply curve. More buyers than supply.
Oregon – Portland and state growth management plans restrict growth and supply. Plus, more buyers than supply.
New Jersey - because it is New Jersey but most likely, more buyers than supply. After all New Jersey has more people per square mile than any other state.

I hope the next two weeks of blog posts will further highlight the real estate opportunity that exists now but may disappear as early 2012 later in 2013. Act rather than react!