Real estate hype: The story may be different in your town

When you look at the newspaper headlines, it's hard to imagine why anyone would want to go house-hunting right now. Foreclosures, short sales, people plunking down 50% and still ending up upside down, etc.

But here's the thing: That's actually only happening in a relatively small portion of the United States. Real estate columnist Ken Harney reports that "More than half of the nation's foreclosures in 2008, researchers found, were concentrated in just 35 counties in 12 states.

You can guess where: California, Las Vegas, Phoenix and Florida. But the really eye-opening finding: In more than 650 other counties, representing one fifth of all markets in the U.S., foreclosure numbers have actually declined since 2006."

The bottom line is this: There really is no "national housing market" except for interest rates, which are at or near record lows. Factors like employment drive housing values, but those are also localized to a large extent.

The best advice for people who are mulling getting into the real estate market is to put down the newspaper, turn off the television, and take a hard look at their local market. Factors like vacancy rates, average days on market, and capitalization rates on rental properties are infinitely more important than some cover story about another Southern California subdivision that's being killed by foreclosures.