I’d take this one step further and say that it isn’t location that matters, it is those incurable defects that impact the property that matter, location being one of those. The concept is easy, there are things you can fix, and things you can’t. Terrible paint colors – Curable. Being next to a highway – Incurable. During the middle and tail end of the boom, buyers began to disregard incurable defects and prices weren’t discounted accordingly. These properties are facing the biggest price declines today, as the next generation of buyers aren’t so quick to overlook those incurable defects, and are looking for discounts in-line with the severity of that defect.
From the Wall Street Journal:
As more U.S. housing markets improve, an adage about what matters in real estate is proving true: location, location, location.
While property markets across the country rose together during the housing boom and fell together during the crash, new data analyzed by real-estate firm Zillow Inc. for The Wall Street Journal show that markets are exiting the downturn at different speeds.
The findings come amid fresh evidence Tuesday of the housing recovery’s tentative progress. May single-family housing starts rose by 3.2% from April on a seasonally adjusted annual basis, while building permits increased 7.9%, according to the Commerce Department. Sales of existing homes in May—a benchmark of the health of the critical spring sales season—are due Thursday, and early reports suggest many markets are notching increases from the weak levels of one year ago.
That fitful recovery is reflected in the Zillow analysis. Homes in sought-after neighborhoods, including those near transportation corridors and with top-notch public schools, are finding buyers. But others in neighborhoods just a few miles away, including so-called exurbs or areas that never fully gentrified, are languishing.
Zillow tracked price changes by ZIP Codes for dozens of metropolitan areas in April compared with three months earlier. The company uses a proprietary model, considering factors such as sales and appraisals, to determine the value of all homes in a given area. The data paint a picture of an uneven housing recovery that is lifting some neighborhoods while bypassing others just a few blocks or miles away. “You can actually see the seeds of the recovery starting to spread at the ZIP Code level,” said Stan Humphries, Zillow’s chief economist.