One of the best parts of this Housing Prospects 50 States Release March 12 2012
One of the things I said in the Newsplex story is that any market analysis that is broader than a street or neighborhood is too broad to make an informed and educated decision. For example:
Standard sales went for prices 72 percent higher than foreclosed sales. This difference occurred partly because foreclosures were more frequent in outer counties where per square foot prices were much lower than in Charlottesville and Albemarle.
This 72 percent figure is stunning â€¦ until you realize it includes not just Charlottesville and Albemarle, but also Fluvanna and Louisa. Fluvanna has had a tremendous amount of foreclosure activity, whereas the City of Charlottesville and County of Albemarle have had lesser degree of foreclosure activity.
Excerpting from the report won’t do it justice; if you’re interested, download the pdf and read it.
The one quibble I would make is that depending on Zillow for local analysis with respect to the Charlottesville MSA is perhaps not the best idea; but from a macro perspective, they’re worthwhile.
Perhaps the best part of the report is this – William Lucy states the need for local analysis and local perspectives. The housing system may be broken, but the solution is not a one-size-fits-all
Each of the actors needs to change. Presidents need more nuanced guidance from their technical advisors. Congress needs a wake-up call that national policies need some reform but should not be totally abandoned. Fannie Mae and Freddie Mac need to adopt realistic policies toward condominiums and avoid impeding their construction and sale. Lenders need to analyze metropolitan and sub metropolitan housing markets and not assume that conditions in New York, Charlotte, and San Francisco apply everywhereâ€”nor is the summary guidance from sale price tracking services sufficient for basing lending practices. Appraisers need to take distinctions between foreclosed sales and standard sales into account and take a more positive attitude toward future prospects rather than project past average declines into the future. Regulators need to encourage local and regional analysis rather than invoke formulas created during the 2008 housing and finance collapse. News media should halt one fact short-cuts to projecting housing prospectsâ€”the latest percentage decline or increase in average housing prices is not useful knowledge. The Federal Reserve should stop saying housing health depends on rescuing underwater mortgagesâ€”which in most states and metropolitan areas are a small proportion of houses and a minor problem for housing markets although they are a problem for some households.
The largest burden, however, falls to developers, builders, and local planning, development, and elected officials to plan, design, propose, review, and support projects that will appeal to emerging market demand. Responsiveness to altered age demographics and location preferences will require more infill redevelopment projects and fewer remote greenfield projects. More of these projects will be mixed use. More of them will be close to neighbors. More of them will alter familiar settings. More of them will be larger than the structures they replace. More of them will increase traffic on site while they reduce traffic elsewhere by accommodating more public transit, biking, and walking trips. More political skill will be required, as well as more planning and design skill.