By Steven Luttman
Former Speaker of the House Tip O’Neil made famous the phrase “All politics is local”. The meaning being that while problems exist on a national level, at the end of the day voters care most about issues close to home.
I would make the argument that real estate, much like politics, is predominantly a local matter. Do country-wide trends matter? Certainly yes. Monitoring data like the monthly Case-Shiller Home Price Index will provide good insight into the overall health of housing.
Does it accurately reflect what’s currently happening in your neighborhood? Oftentimes not at all. Predicting the future of local housing markets can be more art than science. If you don’t believe me, ask Zillow.
The real estate platform lost hundreds of millions of dollars last year due to its iBuyer algorithm overpricing offers made to sellers. As of the writing of this article, publicly traded shares of Zillow Group (ZG) were down 52 percent year to date, vastly underperforming the S&P 500 (SPY) as a whole by roughly half over the same period. Computers are great, but boots on the ground still count for something.
What we do know is that taking a long-term viewpoint, the Capital Region housing market is on sound footing. Our two largest employers (healthcare and local / state government) represent sectors unlikely to see a contraction in staffing, regardless of external economic events. While negative net migration in the state is concerning, this is overwhelmingly a downstate problem.