Harvard Review the State of the Nation’s Housing

Recently the Joint center for Housing Studies of Harvard University released their State of the Nation’s Housing 2010.  It is mind-numbingly thorough – diving into many subfields of housing (new development, resale, reconditioning, foreclosures, etc) and provides a basis for the rational breaking down the data into a myriad of variables (first time buyers, immigrant buyers, joblessness rate, mortgage rates, etc).  As a mathematically inclined group of brokers that like the breakdown, you would think that this would be helpful to us in our business.  Unfortunately, as has come up before on B@C and in the most recent NAR (National Association of Realtors) ads, locality is so important.  Unfortunately in the 31 page tome there is no breakdown on a local level.

However, because they dive into the variables you can use it as a directional way to look at your neighborhood.  One of the most connected variables is that of unemployment.  Housing prices and move to buy (from renting) are dictated heavily by people’s security in their income.  The fear of mortgage payments with no income is much more scary than monthly rent – and for good reason.  With the housing market at a stand still and the majority of your early mortgage payments covering interest, a quick sell would be similar to renting (in that you’ve really paid back little of the principal), and if the market were to drop even a point or two that might put you in the red a few thousand or more. 

While the paper is still educational, it really conforms to a macro-academic level and is difficult to use in our day-to-day here in New York City, the most unique housing market in the country.