In many cases, taking a look at the national market gives you a good picture of the economy.

That's not true in the housing market, though, where geography can play a major factor in pricing, availability, and more. In this video segment, Fool contributor John Maxfield joins Gaby Lapera to discuss the difference between national and local housing numbers.

Listen to the full podcast by clicking here. A full transcript follows the video.

 

This podcast was recorded on 11/30/15.

John Maxfield: The thing here is, Gaby, that when I read these statistics, so let's talk about housing. So you have housing, is, these studies they throw, oh, you know, it's going to be this many years before we get back. But it's important to keep in mind that the housing is actually a local market more so than a national market. Let me just give you some statistics to kind of solidify this in your head.

So nationwide, so I think you said that what CoreLogic said, that they're 20% down, if you add in inflation?

Gaby Lapera: Yeah.

Maxfield: So if you look at, and that's just the same statistics that I have, but if you look at individual cities, you have L.A., which is -- now this is not taking inflation into consideration; this is just on a nominal basis -- L.A. home prices are still down 14%. Houston, since the peak in 2006, home prices are up 30%.

Lapera: I don't even want to know. What are they for D.C.? Do I want to know?

Maxfield: I don't know; I didn't look. I used to live there. too. It's too depressing. Boston is flat. Phoenix is down 31%, Vegas is down 38%, Portland, where I live, we're way up. Denver's up. So you have some places that are way up, some places that are way down. So it's just important to keep in mind that when you're talking about housing; sometimes you've got to look beyond that national number to also kind of take into consideration that some places have much higher escalations on all prices and drops after the crisis.

Lapera: That's true. So I guess keep that in mind when you're home buying.

Maxfield: Let me make one more point, Gaby. That what's going on in the housing market right now, with the increases in home prices in certain cities, the question is, well, it's not like we're getting a lot of great news about the economy, right? I mean, you have, the Federal Reserve isn't increasing interest rates. It still has not increased interest rates because the economy isn't going, inflation is high enough, unemployment is basically where they want it.

Lapera: But who knows, maybe soon. If we look into our crystal ball on the Fed interest rates ...

Maxfield: Exactly. I'm sure we'll talk about that a million more times over the next few months.

Lapera: Who knows? Maybe it will go up in December and we'll be really excited. We've been saying it's going to go up for I think, like, six months.

Maxfield: I know, exactly ... 16 months maybe? But the question is, what is going on with housing? And really, what is going on with housing is this. The inventory of available homes for sale is still really low across the country. I think it's, so at the current sales pace it will take 4.8 months to get through the current inventory of existing homes for sale.

Well, the rule with housing is that if the inventory is equal to less than six months' worth of sales -- which it is because it's at 4.8 right now -- then housing prices will increase, whereas if it's above six months' worth of sales, then it will go in the other direction. So that what's going on in those local markets where you have home prices accelerating really quickly and then those home prices like Vegas and L.A., those places like that, where home prices are still way low. That's just a residual of the financial crisis.

Gaby Lapera has no position in any stocks mentioned. John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.