Local Intel–Update 3/26 with Fixed SlideShow ;-)
People don’t buy nor do they sell homes pegged to national real estate trends. Nor even do potential investors or sellers of land make their decisions based on Case-Shiller or any broad stroke metric. Real estate is as local as the next door neighbor’s property line and the length of the drive or walk to necessary destinations like the school, or transportation, or shops, or healthcare.
Especially since job markets are in convulsion–real estate analyst John Burns calls for employment to retreat to 88% of adults who seek full-time work in the next couple of years–waves of local recesssions, lowpoints, and recoveries will occur in different locales at different moments.
The Concord Group, a land use and real estate consultancy, has plotted a recovery timeline for a number of geographies based on job and household formation dynamics that economic drivers have set in motion. No secret to the formula is that land prices, notoriously sticky, will exhibit give first and come closer to “bid” prices as soon as clarity emerges on the latest Geithner plan for banks’ toxic assets.
Once land truly resets and trades resume at some volume, the lot cost-base of new homes will firm up, and a corrected normalized level of volume and pricing will take shape.
Big Builder editor Sarah Yaussi has produced this brief drill-down of the Concord Group analysis, with commentary from Concord principal Andrew Borsanyi.
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