Unwrapping The February 2011 “MarketWatch” Report

If you track with me here at The Beltway Life you know that when it comes to statistics and market reports I like to get pretty specific. Generally I don’t find broad reports to be applicableĀ nor beneficial to the majority of owners. However, I do believe there are some generalities from this video above that apply to all of us here in Northern Virginia, and some solid points are made.

Specifically:

  • The note regarding last years incentive driven market is an important one as we compare the market performance of the market today with that of last years tax credit fueled spring sales season. However, we also need to remember that we remain in an incentive driven market as the FED continues to work to artificially keep mortgage rates low.
  • The jobs outlook continues to be strong in the DC area. DC was recently rated #1 in the country for it’s job market by BusinessWeek (Bloomberg, via Manpower)

One thing I disagree with, at least in part, is the idea that rising energy and food prices “motivate buyers”. I actually think this works the other way around. Especially after the market we are still working our way out of buyers are nervous, and rising life costs only serve to make them more nervous because that is a factor that is outside of a buyers control. In an area like ours where affordability is such a challenge and long commutes are a reality for many who seek home ownership, the thought of $5.00/gallon gas is a deterrent, not an encouragement.

Now, what DOES motivate buyers? Low, yet rising interest rates, low prices (relative to recent history), and rising rent rates.

How about you? What do you think? Let’s discuss down below…

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