All real estate is of course local, any successful real estate investor will attest to that. That said, how do real estate investors take advantage of or heed warnings to economic data that is released each and every business day? These numbers can signal an economy’s strength or weakness and somereal estate investing reports have a greater impact than others but still, who cares about the national median home value when you’re building a new rental property in Houston, Texas? That’s the real significance of the value of real estate decisions being made locally, not nationally.

 There things that investors should follow that applies to everyone no matter where they invest such as the cost of funds and lending guidelines but investors don’t make decisions based upon information from California when their holdings are three time zones away. Does it make any real difference if home prices are on the rise in Phoenix but still falling in Detroit if your investments are right down the block? No, but sometimes those reports can have effect on local values if the consumer begins to pay too much attention to them.

For example, let’s say some federal agency just released a study that said home loans will be harder to qualify for due to more stringent lending guidelines and rates will go up as well. What’s the impact of that? It sounds to the everyday consumer that if buying is in the future it’s better to start the process now instead of waiting when rates are higher and lending is tighter. That can create a rush to buy. And once that rush has been fulfilled, there can be a falloff and home sales can stagnate. This happened just a few short years ago when certain home buyer incentives were put into place. Housing sales bumped up but then there was a lull in the opposite direction. Instead of increasing home sales, all the federal government did was switch around the purchase dates for homes that would have otherwise been bought anyway.

For consumers, news of higher rates, higher unemployment or poor consumer confidence numbers can have such a mental effect that they sit on the sidelines and do nothing. They can let an opportunity pass by just because they heard something on cable T.V.  Don’t let that do the same to you. Concentrate on your market and make deals when they make sense, not as a result of CPI number.