Being a real estate blogger and research enthusiast, I have had the privilege of watching news reports, reading blogs and articles on a range of topics. Within the last two years, my efforts have been concentrated on the real estate industry, from a business professional viewpoint and natural intrigue to better understand the factors which influence Washington’s housing market.
Through my readings a theme arises over and over which is rarely discussed; analyzing the housing market based on micro economical factors to gain a clearer understanding of what is really happening. The majority of the news reports, blogs and articles focus in on national statistics to apply generalities to many different regions.
In my opinion, the limited analysis and little attention given to micro market factors create ambiguity and confusion for the consumer.
Back in February, I posted thoughts on how the media exaggerates and hypes up “housing booms” and “bubble busts” to gain ratings, Real estate bubble…how funny. These media reports tend to change month to month which are largely dependent on professionals basing opinions using national statistics. How many times, while watching the local news, do we hear housing information based on national statistics? Quite often if recollection is correct.
National statistics will suffice if a report is based on the economic health of nation but that same information gives none or little value when applied to localized markets.
As an example, Western Washington, and more specifically, Snohomish and King County have very different market conditions and economical factors that influence consumer buying behavior, for sake of space only the unemployment rate will be analyzed.
The unemployment rate is more comprehensive that what the surface statistic of 4.4 says. Washington has international and governmental industries throughout the Puget Sound region that supply tens of thousands of jobs giving consumers a high level of economic confidence. Boeing, Microsoft and the United States Military, when compiled, make up a major segment of Washington’s consumer base.
Recently, Boeing has been conducting rapid hires largely due to orders of the 787, Microsoft continues to be a world leader in technology innovation and software distribution which operate the majority of PCs, both business and personal, and the United States Military has 9 bases across the state, Navy (being the largest with 6 ports), Air Force and Army. To include one “what if” statement; what if the biotech and domestic/international trade and transport industries were included in the work force analysis? All this equates to a very large population having the option and purchasing power to sell, invest or grow their real estate portfolio.
Washington’s micro market is very strong and self sustaining due to the excellent employment opportunities across multitude of industries which will not be exiting the region in the immediate future. It may be asked “well…how does this fuel the local real estate market?”.
It goes back to consumer confidence. Economic theory says if consumers have confidence in job security then they are more apt to spend more and save less. Vise versa if consumer confidence is down then they are more apt to save and plan for the possibility of job loss which results in a decline economic market.
Just a moment ago a report came across Fox News on the national housing marketing where market experts said the real estate market is crashing but from my research it just does not add up. Washington is a special state in that national averages can not be applied to accurately forecast the real estate market due micro market factors fueling economic prosperity
