Given the fact the blazing hot real estate market has cooled off, one must wonder whether it is worth buying now in any location. One way to identify a good area deals with jobs. Assessing a Real Estate Market – Jobs
First things first – national trends in real estate mean little when it comes to assessing a local area. During the recent red hot real estate market, national trends would have led one to believe you could buy anywhere and reap insane appreciation rates. This simply was not true. States like Texas and Colorado, for instance, generally showed miserly appreciation rates in the four to six percent range. Simply put, the national trend in real estate was a reflection of an average movement across the country, not a predictor for certain locations.
Without a doubt, the national figures for the real estate market have cooled off dramatically. We are seeing price drops and appreciation rates stagnate in many formerly hot markets. Las Vegas, for instance, was a market that was blazing hot with 25 percent appreciation rates for a couple years running. Now, the market in Vegas has cooled significantly. This is a trend being repeated in numerous markets that were previously hot, hot, hot.
Does this cool off mean you should avoid purchasing real estate? No! It just means you need to pay closer attention to what is happening in the community you are considering. One of the biggest issues to focus on is the job market. This is an issue most people fail to consider, so you can reap huge profits if you get it right.
When considering jobs, you want to look for an area that is exhibiting solid job growth in white collar industries. The fact that 50 McDonalds are opening is not really going to spur the real estate market. On the other hand, the fact that Boeing is opening a massive construction facility in the area is going to bring a boon to the real estate market. White collar jobs lead to housing demands. The more demand there is, the higher prices and appreciation rates go regardless of any national trend.
Five or six years ago, I was taking a flight to Portland. The plane was loaded with employees of a large corporation that were commuting between their homes in California and Portland. It turned out the company was in the process of moving to Oregon and 5,000 employees were going with them. Although I don’t recall the company name, it was in the computer industry. Given this migration of jobs, do you think Portland would have been a good place to buy?
There are many factors that go into the status of a real estate market. If you focus on job growth, you may just find some gems in an otherwise cool real estate trend.
Given the fact the blazing hot real estate market has cooled off, one must wonder whether it is worth buying now in any location. One way to identify a good area deals with jobs.
Raynor James is with FSBOAmerica.org - homes for sale - by owner.
