Housing Market News: Still Cyclical, Seasonal and Emotional

There are conflicting reports on the housing market today. According to news sources and public reocrds, the median sales price nationwide is down close to 16% from a year ago, to $174,100. Simultaneously, there are reports about existing home sales being up close to 4% from the last quarter. All the while, foreclosures are up 7% from the last quarter. But there is one fact about the housing market that arises out of all of these reports: Real Esate is Cyclical, Seasonal and Emotional.

Cyclical Cycles: Run about 15 years in length with the current cycle beginning in late 2006.
Seasonal Changes: Occur every year and follow a fairly consistent pattern.
Emotional Changes: Fear of the unknown is the worst element of any financial market. That is what we’ve experienced for the past nine months.

For property data, real estate reports and market trends, CLICK HERE.

Square Footage Matters! Home Sizes Scaled Down for Frugal First-Time Buyers

Taking note of the current economic downturn, some builders are modifying their plans to suit the budgets of the demanding first-time buyer market; Homes are being built smaller with fewer frills.

One of the most notable trends during the recent housing boom was the rapid increase in square footage of new homes. The increase was an important factor in the variance of average to median sale price growing from 6% to 22%, as stated in the Housing in Crisis Report.

“Since 1960 the median house size has increased from around 1,400 square feet to 1,769. During the recent construction boom, many areas of the country experienced development with homes exceeding 2,200 square feet, with additional improvements such as garages, central air conditioning and two or more bathrooms.”

As the economy works towards recovery, borrowers – especially first-time buyers capitalizing off of the 8,000 tax credit incentive – are reluctant to spend more than what is necessary. Public records and builders’ statistics from this Bloomberg.com article show smaller homes involved in a large percentage of transactions and median prices declining due to a smaller average in size.

Square Footage Matters.

Staten Island Square Footage and Median Price Differentials

A new AccuriZ report titled “Square Footage and Median Price Differentials,” highlights the sales activity of New York City and the differnces between median sale price and price per square foot. Below is an excerpt from the Staten Island section of the report. To see the full Staten Island report, as well as the additional boroughs, CLICK HERE.

Real Estate is like a set of Russian Nesting Dolls. Analysts tend to focus on the entire market, with minimal effort given to the underlying components. As you examine various segments of the markets, different pattern emerge. Generally in real estate there are three rules: Location, Location and Location. And in the current market, if you do not have to sell you don’t.

It is comprised of three elements: Cyclical, Seasonal and Emotional. . The present market comprises of all three, which is extremely rare.

Staten Island is experiencing the slowest value decline of all of the Boroughs at -5.17%. In complete opposite of the other Boroughs, Staten Island is experiencing a greater decline in the Single Family market, but showing increases in two to three family units, as well as properties with a residential unit and commercial unit.

US Home Prices Show 5% Quarterly Growth

News media outlets are busy today with the news of US Home Prices showing a 5% quarterly growth.

Great news for the Real Estate Market, AccuriZ knows and understands that Real Estate is three things: Cyclical, Seasonal and Emotional…

(From HousingWire.com) All regions saw quarterly gains as of July, with the Midwest soaring 11.2%, the South rising 5.3%, the Northeast posting a 2.4% increase and the West gaining 1.1%, according to Clear Capital.

Can this be a sign of potential ‘green shoots’ in the housing market, or can this be attributed to seasonality? Public records of property data tend to show a slight uptick in activty durng the summer months. It will be interesting to see what happens come fall.