Let me introduce myself: I’m Jed Kolko, Trulia’s new Chief Economist, and I will be translating economic trends, housing data and public policy to help you make smarter decisions about real estate and where to live. For many years I’ve been studying why people and businesses move where they do and why some places grow faster than others, and explaining what’s happening with housing, the economy and technology to business executives and government officials. At Trulia, I will continue to do this and will be sharing my thoughts on Trulia Insights, Twitter (follow me @JedKolko), and through the media. In addition, some of my work will be behind the scenes, advising the development of Trulia Estimates and other great data tools on Trulia.com.
Housing – What’s to understand?
I’m joining Trulia at an exciting time for the company and at a critical time for understanding housing. The housing market’s unprecedented downturn brought the economy into a recession and is holding back recovery. The effects have been national and global in scope, creating an urgent crisis as homeowners have lost homes, construction workers have lost jobs and renters face stiff obstacles to buying. Prices still sag and inventory clears slowly as the struggling economy depresses buying power and homes move slowly through the foreclosure process.
But despite the national effects and real urgency of the housing market collapse, we must think locally and take the long view. While national financial institutions and federal policy have the biggest impact on the real estate industry, we need to keep in mind that housing markets are local. Some markets, like Pittsburgh, Dallas and Houston, have actually gained value over the past five years while home prices in others, like Phoenix, Las Vegas and the sprawling Inland Empire region east of Los Angeles, have dropped by more than half. Some neighborhoods have been abandoned and are returning to pasture while others have few vacancies and long lines at open houses. And although a glut of new data comes out on housing prices, sales and the economy every week, it’s the persistent trends that matter. Housing is a long-term investment. Buying, selling or moving costs time and money, and people can’t (and shouldn’t!) decide to buy a home, sell or move based on a weekly or monthly housing market report.
So what affects local markets in the long run?
For starters, we need to look at whether local industries grow, where baby boomers want to retire, whether gas prices rise and make commuting expensive, and whether local regulations allow construction where people want to live. There are so many factors that will affect the future of real estate and it can be incredibly confusing, especially if, like most people, you’re not making decisions about housing every week or every month. I’m here to help cut through all the noise and make sense of which trends really matter and what they mean for where you live today and where you want to live tomorrow.