Often it's hard to be one of the only places in the country where appreciation is lagging, and more people move out of, rather than into, our state. However, there is one big advantage to having the rest of the country on a different time schedule for the real estate cycle: A rising tide lifts all boats.
For several years following the downturn ten years ago, people moving for jobs had trouble buying in the new locations, because they couldn't sell their homes in the places they were leaving. Often they ended up renting when they moved here, in part for that reason, and in part to make sure that their jobs here worked out. In a way, the whole national market got stuck, since people were renting out their old homes, and therefore renting their new ones by necessity. In fact, our relocation department found that the old numbers just switched; instead of 80% of transferees buying, and 20% renting, we went to 80% renting and 20% buying. That was obviously not good for absorption in our market area of Greater New Haven.
Now, however, transferees coming in are mostly coming from places with markets that are fully recovered--in some cases, declines from the post-recession peak have already occurred. Those people are coming with equity to put into homes here, and a positive attitude acquired from their latest real estate transaction. While it doesn't mean that they will overpay here, and that values are still well below their peaks in many towns and neighborhoods, it does mean that there are new buyers out there. And that's good news for all of us!
Showing posts with label Appreciation. Show all posts
Showing posts with label Appreciation. Show all posts
Friday, September 8, 2017
Friday, July 1, 2016
Interpreting Statistics
Yesterday's news for real estate in Connecticut was that unit sales for residential properties rose by 23.9%. That's the biggest single increase in a few years. However, the median price of a home dropped by 7.2%, which was also the biggest change in several months. What can we learn from that, and what are they measuring?
First of all, they aren't usually,in reports like this, looking at the same property being sold and resold. Some, like the Case-Shiller index, take the value of all of the real estate together in one city, and compare it to the total value in another period. Others aggregate lots of individual sale prices, but it still isn't apples to apples; that is, it's not the same house being sold at the first period mentioned, and again at the second.
Therefore, most such data can be skewed by the type of properties sold in the greatest amount. In this case, it's most likely because first-time homebuyers, lured by low interest rates and family formation, are out in greater numbers than high-end buyers. We know that this is true in general, because the loss of GE alone is causing very high inventory over a million dollars in Fairfield County. We also would suspect this explanation, due to the constant news about the weakness of Connecticut's economy, and the flight of older, wealthy taxpayers to states with estate tax rates that mirror the Federal ones (which is almost everywhere else). We also would think this distribution is likely because the first-time homebuyers are driving the market in other states as well.
So what does this mean for the value of an individual home? Well, it's good news in the sense that demand for homes in general will drive up prices over the long run. In the short run, it's anecdotally true that most homes purchased within the past ten years are selling for the same or less than they were bought for then. However, many factors could influence this. How much work has been done to the home? Exactly what micromarket is it in, and what's the supply there? How has the neighborhood changed over the past decade? Where's the buyer coming from, and how quickly does she/he need to move? How quickly does the seller need to move, and how much equity does he/she have? What are the other terms of the sale?
So, as with most things, the final answer is "it depends". However, the robust demand is cause for celebration!
First of all, they aren't usually,in reports like this, looking at the same property being sold and resold. Some, like the Case-Shiller index, take the value of all of the real estate together in one city, and compare it to the total value in another period. Others aggregate lots of individual sale prices, but it still isn't apples to apples; that is, it's not the same house being sold at the first period mentioned, and again at the second.
Therefore, most such data can be skewed by the type of properties sold in the greatest amount. In this case, it's most likely because first-time homebuyers, lured by low interest rates and family formation, are out in greater numbers than high-end buyers. We know that this is true in general, because the loss of GE alone is causing very high inventory over a million dollars in Fairfield County. We also would suspect this explanation, due to the constant news about the weakness of Connecticut's economy, and the flight of older, wealthy taxpayers to states with estate tax rates that mirror the Federal ones (which is almost everywhere else). We also would think this distribution is likely because the first-time homebuyers are driving the market in other states as well.
So what does this mean for the value of an individual home? Well, it's good news in the sense that demand for homes in general will drive up prices over the long run. In the short run, it's anecdotally true that most homes purchased within the past ten years are selling for the same or less than they were bought for then. However, many factors could influence this. How much work has been done to the home? Exactly what micromarket is it in, and what's the supply there? How has the neighborhood changed over the past decade? Where's the buyer coming from, and how quickly does she/he need to move? How quickly does the seller need to move, and how much equity does he/she have? What are the other terms of the sale?
So, as with most things, the final answer is "it depends". However, the robust demand is cause for celebration!
Wednesday, November 5, 2014
CoreLogic: Conn. Ranks 49th In September Home Price Appreciation
The following article is from the commercial record, please click here to go to the commercial record and read their articles
Home prices nationwide, including distressed sales, increased 5.6 percent in September 2014 compared with September 2013, according to a new report from real estate analytics firm CoreLogic. On a month-over-month basis, home prices nationwide, including distressed sales, were nearly flat, inching down 0.1 percent in September 2014 compared with August 2014.
At the state level, including distressed sales, all 50 states and the district of Columbia posted year-over-year price increases in September. Five states posted new all-time high prices.
Excluding distressed sales, home prices nationally increased 5.2 percent in September 2014 compared with September 2013 and 0.1 percent month-over-month compared with August 2014. Also excluding distressed sales, only Mississippi showed year-over-year home price depreciation in September, with prices there dipping 0.9 percent. Distressed sales include short sales and real estate-owned (REO) transactions.
CoreLogic predicts that home prices, including distressed sales, will increase 0.1 percent month over month from September 2014 to October 2014 and, on a year-over-year basis, by 5 percent from September 2014 to September 2015. Excluding distressed sales, home prices are expected to rise 0.1 percent month-over-month from September 2014 to October 2014 and by 4.6 percent year-over-year from September 2014 to September 2015.
"There has been a clear bifurcation in home price growth for lower-end versus upper-end properties in 2014," Sam Khater, deputy chief economist at CoreLogic, said in a statement. "As of December 2013, both lower-end and upper-end property prices were up 9.7 percent on a year over year basis. As of September, lower-end prices were up 9.4 percent but upper-end prices were up only 4.5 percent."
Including distressed sales, Connecticut ranked 49th among all states for home price appreciation in September, with Nutmeg State prices rising 1.2 percent, according to CoreLogic. The five states with the highest home price appreciation were: Michigan (10.3 percent), Montana (10 percent), Maine (9.6 percent), Massachusetts (8.8 percent) and California (8.5 percent).
Excluding distressed sales, Connecticut prices were up 2 percent. The five states with the highest home price appreciation were: Maine (10.4 percent), Massachusetts (9.7 percent), California (7.6 percent), Texas (7.4 percent) and Michigan (7.2 percent).
Ninety-six of the country's top 100 largest population centers, according to the U.S. Census, showed year-over-year increases in September 2014. Two of the four that did not were in Connecticut: the New Haven-Milford area and Hartford metropolitan area. Rochester, N.Y. and Little Rock, Ark. were the others.
Including distressed transactions, U.S. home prices remain 12.6 below their peak in April 2006. Connecticut prices remain 19.9 percent below their peak.
Home prices nationwide, including distressed sales, increased 5.6 percent in September 2014 compared with September 2013, according to a new report from real estate analytics firm CoreLogic. On a month-over-month basis, home prices nationwide, including distressed sales, were nearly flat, inching down 0.1 percent in September 2014 compared with August 2014.
At the state level, including distressed sales, all 50 states and the district of Columbia posted year-over-year price increases in September. Five states posted new all-time high prices.
Excluding distressed sales, home prices nationally increased 5.2 percent in September 2014 compared with September 2013 and 0.1 percent month-over-month compared with August 2014. Also excluding distressed sales, only Mississippi showed year-over-year home price depreciation in September, with prices there dipping 0.9 percent. Distressed sales include short sales and real estate-owned (REO) transactions.
CoreLogic predicts that home prices, including distressed sales, will increase 0.1 percent month over month from September 2014 to October 2014 and, on a year-over-year basis, by 5 percent from September 2014 to September 2015. Excluding distressed sales, home prices are expected to rise 0.1 percent month-over-month from September 2014 to October 2014 and by 4.6 percent year-over-year from September 2014 to September 2015.
"There has been a clear bifurcation in home price growth for lower-end versus upper-end properties in 2014," Sam Khater, deputy chief economist at CoreLogic, said in a statement. "As of December 2013, both lower-end and upper-end property prices were up 9.7 percent on a year over year basis. As of September, lower-end prices were up 9.4 percent but upper-end prices were up only 4.5 percent."
Including distressed sales, Connecticut ranked 49th among all states for home price appreciation in September, with Nutmeg State prices rising 1.2 percent, according to CoreLogic. The five states with the highest home price appreciation were: Michigan (10.3 percent), Montana (10 percent), Maine (9.6 percent), Massachusetts (8.8 percent) and California (8.5 percent).
Excluding distressed sales, Connecticut prices were up 2 percent. The five states with the highest home price appreciation were: Maine (10.4 percent), Massachusetts (9.7 percent), California (7.6 percent), Texas (7.4 percent) and Michigan (7.2 percent).
Ninety-six of the country's top 100 largest population centers, according to the U.S. Census, showed year-over-year increases in September 2014. Two of the four that did not were in Connecticut: the New Haven-Milford area and Hartford metropolitan area. Rochester, N.Y. and Little Rock, Ark. were the others.
Including distressed transactions, U.S. home prices remain 12.6 below their peak in April 2006. Connecticut prices remain 19.9 percent below their peak.
Subscribe to:
Posts (Atom)