Real Estate Ain’t So Local Anymore

August 6, 2007 |

I will be posting the sales statistics for the Charlottesville area on Friday.  As always, it should prove interesting, so be sure to check back for them.

The statistics got me to thinking about the real estate market, or more specifically, how the real estate market is talked about.  There is an old saying that, “real estate and politics is local,” meaning that political issues and the real estate market are affected more by geographic location than anything else.  We all know that this is true to some extent, and market data bears this fact out.  The real estate market in Charlottesville is going to be different than the market in San Franciso, or Chicago, or even Richmond, for that matter.

While it is true that the real estate market is affected more by local conditions than any other factor, it appears to me that there are more and more external influences coming into play, the largest of which is media coverage of real estate.  By media coverage, I am referring not only to news journalism, but also to popular media like cable TV shows such as “Flip That House” or “Property Ladder.”  Because information is so easily and quickly accessible, thanks in no small part to the Internet, what once was only local can now be broadcast to an entire country.

The current real estate market is a perfect example of this.  Media coverage of the national real estate market is all about falling prices, rising inventories, and loads of foreclosures.  While this macro-view of the real estate market may be accurate, it doesn’t necessarily apply locally.  In the Charlottesville area, we have seen rising inventories to be sure, but prices have remained relatively stable.  And while foreclosures in the area may have increased (to be honest, I don’t know, as I haven’t seen any local stats for this), sub-prime lending certainly has not had the same effect here that it has had in say, California.

To some degree, however, none of this matters.  Real estate consumers are being constantly bombarded with this information, and whether or not is applies directly to their local markets, it will affect the way in which they make decisions about buying and selling.  If enough buyers hear and read stories about how sellers are having to take contracts for 10%-15% below their asking price, they are going to act accordingly.  This will happen regardless of the fact that they sellers in the stories are in Los Angeles and they are buying a house in Charlottesville.

Our current information age has made the world a much smaller place.  It has made us more connected than ever, and has the power to erase divisions and blur borders.  Because of this, real estate markets are affected not only by the conditions in their local area, but also by the conditions in other markets, near and far.

[tags] real estate, realtor, charlottesville, virginia, media [/tags]

Posted by Daniel | Filed Under Buying, Market Statistics, News, Selling 

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