If you turn on any national news channel in the morning before work you will always see the weather forecast for the day. And sure enough, when they go to the “your neck of the woods” weather report, you will see your local weather news person give a quick 15-20 second local weather report. Seems to be just the way it is with weather reports.
But then, the next segment that comes on talks about the national real estate market…..is there such a thing? No local reports as with the weather, just one report that is supposed to encompass every real estate market in the nation.
So, if I am getting this right, what is happening with real estate in New York or Florida or Wisconsin or Washington is also happening in California? Or better yet, what is happening in Northern CA is also happening in Southern CA? What about my hometown of Big Bear Lake, which is predominately a second home resort town, it must be exactly the same as all the primary home markets that surround it, right?
I think we all know that these statements are just not true. If I am traveling up to Mammoth, CA or Newport Beach, CA for the weekend, I am going to check the weather for those areas before I go. What the weather is doing in my hometown of Big Bear has no bearing on those areas. The same goes for the real estate market. Prices, demand, supply, financing, market nuances & customs are going to be different from area to area. Just as there is not a national or state weather temperature, nor is there a national real estate market.
We have heard a thousand times “Real Estate is Local!” What does that mean? I guess the bigger question is why don’t people understand that? Most of the buyers and sellers for Big Bear properties come from areas throughout Southern CA. Many of them seem to think that the Big Bear market is performing exactly the same as their primary home market of San Diego, L.A., Orange County, or Riverside. If three foreclosures sold in Santa Barbara (I don’t know if they even have foreclosures there) this weekend, it would have no effect on the Big Bear real estate market. The fact is that they are all totally different markets driven by very different circumstances.
Quite simply the values and market conditions of real estate are directly related to the local economic & demographic conditions of that area. Now, many people will have you believe that real estate is just plain bad right now. For a lot of areas this may be true, but for many others it is not.
The key point is that in order for one to determine how a particular market is performing, one needs to look at the market data for that area.
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