New numbers are coming out of the housing industry, and they’re sending mixed messages. The National Association of Realtors released data in July that proclaimed the national median home price reached an all-time high of $230,400. This record-breaking high was a source of celebration for some, as it indicates the end of the housing recession that some claimed would never come.
However, many are underwhelmed by this news. There is not a “national” market for real estate, and the so-called national median is merely an extrapolation of local market data. Those of us in the real estate business, including realtors, lenders, contractors and developers, should recognize this news as a sign of how much we have accomplished in the past few years, but also of how much work we have left to do. Here’s a more nuanced look at the recent real estate numbers.
Local Highs a Better Watermark than National
Homes.com has found that 46 percent of the homes in over 300 markets have reached or surpassed their peak prices from 2007, the year before the housing crash. Does this mean victory for us in the real estate business? Price recovery is a good indicator of the health of the market, but this data is skewed by the recovery of markets that suffered little during the recession. Those markets that were hit more heavily during the recession still have a lot of work ahead of them to fully recover.
The Work Ahead of Us
Certain areas were affected more than others in the 2008 crisis, and recovery has not been the same across the board. First-time buyers in 2015 are paying 2.6 times their annual income, a massive increase from 1.7 just over 40 years ago. Buyers today, who may have been able to afford a house a few years ago, are now unable to afford the skyrocketing rent prices. The market is being complicated further by multi-bid deals, which lower commissions and create low appraisals. When the winning buyer spends more money on the property than they should, no one comes out on top.
Lakeside Title Solutions
Every economic environment presents its challenges and opportunities, and this current environment is no different. Here at Lakeside Title we work with lenders, realtors, contractors and developers to optimize the mortgage closing process. We facilitate sales, resales, and refinancing. We also provide title insurance and title searches. For more information about our services, please visit our homepage.