Lately, all you seem to hear from the media is bad news about the housing market. It seems that when we think it couldn’t get any worse, another grim headline tells us it is indeed getting worse. Nothing against the media, I read the headlines daily and would never suggest that we ignore what they have to say. However, it seems to me that they always emphasize the negative and spend little time dwelling on the positive. In the past few weeks, we have seen gas prices fall at record speed and everyone can agree our wallets are breathing a sigh of relief. However, the news will say that we should beware because falling prices could mean more bad news. I say how about focusing on the good for once? We are all feeling the pinch and I personally am paying over a dollar less for gas this month than last. My gas bill has been reduced greatly and that is always a good thing in my book.
I say all this not to place blame on the media, but to remind all of you to look for the silver lining. There is good news out there everywhere and you just have to focus on that. Here at Frusterio we are directly affected by what is happening in the housing market, but I am here to tell you that we are doing great! If you have a superior product, you can make it. That is the biggest difference, people can afford to be pickier because prices are low and inventory is high. Why buy something that is just okay when you could have something really special?
We scan the news sources regularly and we find pieces of good news popping up everywhere and in increasing numbers. We stumbled upon an article the other day that I encourage all of you to read, “Home Prices: Now for the Good News.”
The article tells of a couple who decided to put their 3 bedroom home in Philadelphia’s Graduate Hospital district on the market this summer. Just 45 days after listing it, a buyer snapped it up for $29,000 more than they family paid for the home in 2006. They actually turned a PROFIT.
Of course the housing market is still looking pretty grim, but the article suggests that the market may be reaching its bottom and that “the overbuilding and speculative pricing that inflated the housing market bubble are working their way through the system. In October 2005, near the peak of the boom, the median sales price for a U.S. home reached 7.3 times per capita income; by this May it had fallen to 5.7, in line with historical norms. Nationally, the rate of decline in sales is slowing, and in some regions sales numbers have actually perked up.”
So why so much bad news and dismal numbers still? The national sales figures that we are always hearing reports on and that are so depressing are brought down by boom-and-bust markets like Las Vegas, Miami and Phoenix. Hardest-hit states are also contributing to those numbers such as California, Arizona, Nevada and Florida. If you take those hardest hit states out of the statistical mix, the picture is much more promising. “According to PMI’s “risk index,” which estimates the odds of prices falling in a given market, at least 65 percent of the nation’s 386 metro areas have less than a 10 percent chance of seeing lower prices two years from now. What’s more, the government’s sweeping bailout of the financial sector could boost the housing market.”
A look at the numbers for individual areas yields some surprising and encouraging news. The article profiles 7 of the best looking markets and gives a link to the 25 metropolitan areas that are most promising. The top 7 are Seattle, Des Moines, Raleigh, Salt Lake City, Philadelphia, Birmingham and Denver. Since Frusterio is located in Birmingham, Alabama, and the majority of our client base is here (although we regularly work with clients throughout out the U.S.) I thought I would quote the section on Birmingham for you below. Be sure to check out the entire article for more good news and profiles of the other cities mentioned. Enjoy.
The University of Alabama at Birmingham anchors this city’s economy, operating an 18,000-student campus and major medical center whose recession-proof demand has helped the local economy weather the current downturn. And even the manufacturing sector is relatively healthy here: About 40 miles outside Birmingham, two auto plants—for Mercedes and Honda—employ workers whose textile jobs moved offshore over the past couple of decades. The city’s low labor and land costs attract businesses to locate here rather than in rival cities elsewhere in the region like Atlanta or Charlotte. Birmingham holds its own in the culture department as well: It boasts two restaurants with chefs nominated for James Beard Foundation Awards, in addition to the Alabama Symphony Orchestra, Opera Birmingham and the Birmingham Museum of Art, whose popular Art on the Rocks programs draw young professionals to sip cosmos amid the Cassatts.
The region’s attractions have helped cushion the impact of the national housing slump. Median home prices in the area that encompasses Birmingham’s Jefferson and three other counties have held up well. “We have avoided the peaks and the valleys,” says Russell Cunningham, president of the Birmingham Regional Chamber of Commerce. The suburb of Mountain Brook has fared particularly well, with a median home price increase of just under 5 percent in the first half of this year. The affluent community’s three villages, most of them laid out in the 1920s and ’30s, form a leafy triangle in the Appalachian foothills. At $535,000, Mountain Brook’s median home price for the first half of 2008 is well above the region’s median of $163,500. And the area lies less than five miles from Birmingham’s downtown business district, so residents are anything but cut off from the city’s amenities.”