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April 10, 2007

All housing markets are local

There’s an old saying that all politics is local, and when it comes to housing markets, N.C. State University's Mike Walden says that economists say the sentiment applies to housing markets.

Location makes a big difference in housing prices, he says, "and that's because when you buy a home, you are not just buying the square footage of that house -- you are not buying the bricks and mortar and everything that’s in the house -- you are also buying into the surrounding neighborhood.

"And so you can take two houses exactly the same in size, in structure, and amenities in the houses and put them however in different neighborhoods, and the prices will be different, and the rate of price appreciation will be different," says Dr. Walden, a professor of agricultural and resource economics.

"Recently we have seen that housing prices in neighborhoods that are more accessible, neighborhoods that have better schools, nicer amenities, near bodies of water, neighborhoods that are safer -- houses there have been going up faster in price than houses in neighborhoods that don't have those characteristics," he adds.

"So never expect two houses that are the same to necessarily be priced the same nor have the same rate of appreciation."

Posted by deeshore at April 10, 2007 08:32 AM