The Data speaks for the market.
From my first class in college in investment banking that I thoroughly enjoyed, Statistic and Probability to my Wharton training in Investment Management Analysis, I have found that data shows the condition and direction of a market.
We went through a shut down from March to May. The shut down did have a negative effect on sales and house prices. That result is difficult to use in statistical analysis because that was a controlled market place. Once we had the release the effects on the housing market have shown the direction in the market with built up buyers coming into the market in a BIG FASHION!
Atherton had a 37% decline in sales price and a 22% decline in sales volume. Woodside had a 8% increase in sales price and a 63% decline in volume. Portola Valley had a had A 13% INCREASE IN HOME PRICES AND A 436% INCREASE IN SALES VOLUME! Menlo Park followed with a 86% increase in sales price and a 131% increase in sales volume. Palo Alto had a 13% decline in sales price and a 11% increase in volume. Redwood City had a 2% increase in prices and a 60% increase in volume.
The optimism for real estate is followed with new home purchases remaining high. New home builders are saying buyers are considering new construction as a safe way to invest not only in their future, but in their well being.
Despite the Spring time slow down from shelter in place the real estate market is still safe and solid.
The transition of renters as seen in rental price declines in places like San Francisco of 20% with a 6-7% vacancy rate. Similar declines in rental prices has occurred. Housing units for rent in Redwood City alone has Zillow posting over 200 "for rent postings" that mainly are dominated by the new construction apartment complexes. From personal experience sales of previously rental properties are becoming common in Redwood City. The clue to the declines and occupancy could be "work at home" is pushing renters to new construction projects in the East Bay and South Bay giving rise to the New construction positive numbers.
This is complicated by the rental moratorium The moritorium started in March to April and has been extended to September by the Governor. Landlord lawsuits are beginning to dominate court records. It improbable the suit will help to return the lost income from any source than the creator...The State of California. Where in the constitution does the State get the right to take from property owners their source of income without proper compensation? While it is understandable of the landlords case of having investment property governmental action taking income from it our situation is quite different when the population at whole is at risk.
All income investment sources do have risks. Dividends are cut, interest payments are missed and bankruptcy creates a loss of value in all investment. Real Estate in our area has led a charmed life. The cost of living has gotten out of order in our area. The middle class and below have tried to make ends meet for years. We have all heard and read about it. Now it appears the corrective action is occurring. We are not living in England in the time of Dickens!
This next shut down may end up being a very decisive period as the service industry employees will all find themselves without job and insufficient unemployment income to cover rent and daily expenses. Move to cheaper pastures is the eventual outcome and lower rents to create affordability
As a conservative friend of mine has stated, "you elected him now suffer with him". It is easy to blame politicians for the current situation. They are only dealing with the deck they have been dealt. Unfortunately the deck has had many issues for many years and now the dealer is dealing a bad hand.
I believe we will see how the deck is played in the coming months as California must take care of a $54 billion budget short fall and landlords losing not only income but value of an income property that no longer creates income.
The question I have is there statistical information that can tell me where the renter are going, where the sellers are going and who are the buyers? The big jump in Portola Valley would indicate to me that there is the movement to safe environments with larger properties, good schools and proximity to work. Menlo Park has finally obtained the value over Palo Alto as Menlo Park has good schools, but larger lots and price per square foot less than Palo Alto. Woodside is an enigma. It has an excellent school, large acreage and proximity. Redwood City is affordability. Atherton can bounce around in any market.
We may be seeing a major adjustment in the nature of our citizens and socio-economic nature all brought out by the virus. Only time will tell if the trend will continue?
Anyone have a Crystal Ball?
We went through a shut down from March to May. The shut down did have a negative effect on sales and house prices. That result is difficult to use in statistical analysis because that was a controlled market place. Once we had the release the effects on the housing market have shown the direction in the market with built up buyers coming into the market in a BIG FASHION!
JUNE 2020
Atherton had a 37% decline in sales price and a 22% decline in sales volume. Woodside had a 8% increase in sales price and a 63% decline in volume. Portola Valley had a had A 13% INCREASE IN HOME PRICES AND A 436% INCREASE IN SALES VOLUME! Menlo Park followed with a 86% increase in sales price and a 131% increase in sales volume. Palo Alto had a 13% decline in sales price and a 11% increase in volume. Redwood City had a 2% increase in prices and a 60% increase in volume.
The optimism for real estate is followed with new home purchases remaining high. New home builders are saying buyers are considering new construction as a safe way to invest not only in their future, but in their well being.
Despite the Spring time slow down from shelter in place the real estate market is still safe and solid.
The transition of renters as seen in rental price declines in places like San Francisco of 20% with a 6-7% vacancy rate. Similar declines in rental prices has occurred. Housing units for rent in Redwood City alone has Zillow posting over 200 "for rent postings" that mainly are dominated by the new construction apartment complexes. From personal experience sales of previously rental properties are becoming common in Redwood City. The clue to the declines and occupancy could be "work at home" is pushing renters to new construction projects in the East Bay and South Bay giving rise to the New construction positive numbers.
This is complicated by the rental moratorium The moritorium started in March to April and has been extended to September by the Governor. Landlord lawsuits are beginning to dominate court records. It improbable the suit will help to return the lost income from any source than the creator...The State of California. Where in the constitution does the State get the right to take from property owners their source of income without proper compensation? While it is understandable of the landlords case of having investment property governmental action taking income from it our situation is quite different when the population at whole is at risk.
All income investment sources do have risks. Dividends are cut, interest payments are missed and bankruptcy creates a loss of value in all investment. Real Estate in our area has led a charmed life. The cost of living has gotten out of order in our area. The middle class and below have tried to make ends meet for years. We have all heard and read about it. Now it appears the corrective action is occurring. We are not living in England in the time of Dickens!
This next shut down may end up being a very decisive period as the service industry employees will all find themselves without job and insufficient unemployment income to cover rent and daily expenses. Move to cheaper pastures is the eventual outcome and lower rents to create affordability
As a conservative friend of mine has stated, "you elected him now suffer with him". It is easy to blame politicians for the current situation. They are only dealing with the deck they have been dealt. Unfortunately the deck has had many issues for many years and now the dealer is dealing a bad hand.
I believe we will see how the deck is played in the coming months as California must take care of a $54 billion budget short fall and landlords losing not only income but value of an income property that no longer creates income.
The question I have is there statistical information that can tell me where the renter are going, where the sellers are going and who are the buyers? The big jump in Portola Valley would indicate to me that there is the movement to safe environments with larger properties, good schools and proximity to work. Menlo Park has finally obtained the value over Palo Alto as Menlo Park has good schools, but larger lots and price per square foot less than Palo Alto. Woodside is an enigma. It has an excellent school, large acreage and proximity. Redwood City is affordability. Atherton can bounce around in any market.
We may be seeing a major adjustment in the nature of our citizens and socio-economic nature all brought out by the virus. Only time will tell if the trend will continue?
Anyone have a Crystal Ball?
Comments
Post a Comment