Through the years, I’ve enjoyed quoting New York Yankees catcher Yogi Berra in many of the market presentations I make, especially at key baseball-related times of the year, like opening day and October pennant races and the World Series. In a tribute to Berra’s passing this week, I offer some favorite quotes that apply to insights I can share about housing.
‘You can observe a lot by just watching’
I watch real estate trends daily, but I learn the most when I’m on the road talking to local Realtors® about what’s happening in their neighborhoods. All housing is local, so the neighborhood is really where the action exists. Keep watching realtor.com®, as we’ll identify hot markets, hot ZIP codes, and how trends are unfolding—but there’s no match for getting out there and talking to local professionals.
‘When you come to a fork in the road, take it’
Buying a home is a very personal decision, influenced by financial and qualitative considerations. You’ll have many choices of home type, neighborhood, how much to put down, and what type of mortgage to use. In most cases, there won’t be a clear best choice. So, the most useful piece of advice I can give anyone is to find an expert local Realtor to help you choose the best fork for you.
‘No one goes there nowadays, it’s too crowded’
Prices continue to rise this year, especially in the hottest markets, as supply is very thin relative to demand. As a result, homes for sale get snapped up quickly and many listings receive multiple bids. But the demand is real in these markets, driven by household and job growth, and strong growth in incomes by the households who are looking to buy. As long as the economic growth remains robust, don’t expect demand to weaken substantially beyond the normal seasonal decline in the fall and winter.
‘A nickel ain’t worth a dime anymore’
We’ve experienced another year of above-average price appreciation, as a result of demand outpacing supply. The increases brought us back to a new nominal record for the median existing-home price in June, but on an inflation-adjusted basis, prices remain about 20% beneath the peak in 2006.
‘If the world were perfect, it wouldn’t be’
Like snowflakes, no two homes are the same. Even if they’re built by the same builder, on the same street, they will have subtle differences caused by variations in the land upon which they sit. In addition, homes are not built by robots in sealed, controlled factories. As they age, the variation in features and when key components were updated becomes very hard to predict.
Because real estate is physical, assessing values and market prices requires informed local insights about the specific home and its features and condition. Be careful of any form of automated price estimates and market reports derived from them, as they assume the data are perfect and the computer model knows everything it should. I can assure you that the data aren’t perfect—and never will be—thanks to the uniqueness of homes.