Re: If you can afford to buy a house/condo should you do it to avoid r
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Markets are so local in real estate its absurd. Zoning regulations, city improvements etc etc etc matter infinitely more than any national news, swongs etc. I don't know if I can be more clear about this. You need to do the numbers for your own market, the specific properties you're looking at and the utility each option has for you (perhaps renting despite losing a shade of money means a nicer location, less stress etc etc).
Some markets have been almost completely flat with normal 1-3% appreciation over the last decade, while other places have boomed. Frequently these places are within 50 miles of each other.
jono,
Actually I'd say the national trends are more indicative of the smallest portions of the housing markets. The coastal areas and a few metros. Most of America isn't in these markets. And even within those markets I'm sure there are pockets that defy national trends. National trends are created from the summation of local markets, not vice versa.
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Can't you say this about everything? Clearly, no one is saying that prices of housing all over the US move exactly together, just that there are cyclical trends that may exert downward pricing pressure on all housing, much as there was an upward pressure until 2005 or so.
Also, because of the importance of capital markets on the housing market this time around, correlation will be higher than ever before. Consider, for instance, the correlation among national housing markets in the past and what's going on right now . That is not to say there aren't going to be exceptions (just as there are stocks that perform well even during crashes) but even completely unrelated asset prices become correlated when they are funded through a similar mechanism and/or held by the same entity or similar entities. Think MBS, homebuilders, REOs and speculators. Furthermore, the implied discount yields (annual implied/imputed/actual rent divided by price) fundamentally must be highly correlated and the substitution effect of housing is real at least on a large time scale.
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