According to a recent Wall Street Journal article written by M.P. McQueen.
JOBS. Some parts of the country were less affected by the recession than others. Prospective buyers should review job growth data from the U.S. Bureau of Labor Statistics, at www.bls.gov. Unlike many backward-looking economis statistics, jobs data are only about a month old and can "clearly show the direction of the local economy," says Carolyn Beggs, chief operating officer of real-estate data provider Local Market Monitor Inc. The National Association of Home Builders also posts state and local employment data, at NAHB.com.
You also want to see a brightening personal-income picture for the previous six-month period. Those numbers are available via the U.S. Dept of Commerce's Bureau of Economic Analysis, at www.bea.gov.
RECENT SALES ACTIVITY. Three factors should be taken together: housing inventory, sales volume and prices. A large inventory of homes with few actual transactions are negative indicators, according to Jeffrey Jackson, chairman of Mitchell, Maxwell & Jackson Inc., an appraisal company in New York. On the other hand, if inventory is falling and transactions are picking up, that is a good sign.
State and local boards of realtors often publish monthly inventory statistics. Inventory breakdown by metro area also can be found at the U.S. Census Bureau's website, in the American Community Survey (www.census.gov/acs/www/). Be sure to compare current inventories with long-term averages.
Also, check out the rental vacancy rates in your area, and judge them against historical rates, which you can find at Census Bureau's website (www.census.gov) or via local real-estate professionals.
CONSTRUCTION. While not as reliable as jobs or sales-trend data for getting a read on a local housing market, the number of permits recently issued for local builders is useful for gauging builder sentiment and, by extension, future housing activity.
You can get recent permit information from your county or municipal building department, or via the National Association of Home Builders (www.nahb.com).
MORTGAGE AVAILABILITY. If you live in an area where most people use mortgages, it is especially important now to gauge local lending patterns. In the aftermath of the financial crisis, most national banks tightened lending standards. But some local banks haven't been hit as hard by the housing crash and are more willing to lend, even for higher-priced homes.
For instance, some smaller lenders in the New York and New Jersey area, such as Lake Success, N.Y.-based Astoria Federal Savings, are actively courting new "jumbo"-mortgage customers. Astoria Federal says it elieves jumbo-loan borrowers pose less risk than borrowers because they can demonstrate ample income and often opt for hefty down-payments.
ANECDOTAL EVIDENCE. It might sound old-fashioned in an era of electronic data, but driving around neighborhoods, checking out open houses and talking to local agents still are good ways to gather local-market intelligence.
The key to do this kind of research only after you have gathered hard data, so that you don't misread the signs. For example, foreclosed homes can generate multiple bids and quick sales, often in all-cash deals-but that doesn't mean the market is healthy.