Housing Price Trends Posts 3Q2021 Results

Housing Price Trends has updated the price charts with 3Q2021 Housing Price Index data. For this quarter, there were an amazing 73 BUY signals and no SELL signals. Of the 73 BUY signals, there were 20 BUY signals  in the top 148 cities in which to invest. Remember the BUY signals that occur outside of the top 148 cities are not as meaningful, since those cities have prices that generally go up and down on much smaller amounts.

This is a major shift in BUY and SELL signals: the BUY signals in the top 148 cities more than doubled and no SELL signals in any of the cities indicate a further distortion of the housing market. In my humble opinion, this cannot continue: if, and when, there is a correction, the results might be painful. There have been unprecedented geographic population shifts which have added to housing price trends.

With some caution, there are some areas that will appreciate and be very profitable in the near future. However, I would expect that the SELL signal to occur sooner rather than later in some of these areas.

I expect some major changes in 2022; stay tuned for the next update.

When researching a particular city be sure to check our annual " HPT Proficient Performance Report: Housing Price Index Percent Change, Year to Year, by State-City-Zip" to investigate price changes by zip code. Here is part of that report for Fresno, CA:

 

 

 

 

 

 

Note how different zip codes have much different price patterns. Zip code 93701 had some very high annual appreciation scores, while appreciation for zip code 93711 was generally low with some negative appreciation years.

How To Create An Appealing Rental Property

Whether you are looking to purchase a new rental property or you are a homeowner looking to rent out your property, then you need to do it just right. While many people like to buy houses outright, many others enjoy renting, so there is a big market out there. If you want to make the most profit then you need to set up your rental property to be as attractive as possible, and there are many ways to make that happen. Here at Housing Price Trends, we are experts on the housing market, so we have some great tips for how you can prepare your home to be the ultimate rental.

Create A Plan

Before you start marketing your home or making major renovations, you need to create a plan of action. First, you need to decide if you plan to buy a new property to rent out or if you want to rent out a home that you already own. Renting to others is a good idea if you don’t plan to live in the house again because if the renters get comfortable, they may not want to leave and you can continue to earn rent money.

Whether you rent your existing home or buy a new rental property, you will also need to decide if you plan to be the landlord or if you want to hire a property manager to keep an eye on things. First you will need to look at your budget to see if you can even afford a manager. Once you hire them, you will want to lay out all the details, including how much you plan to charge for rent, when it will be due each month, and how it will be collected.

If you want to run your rental more like a business then you should consider creating a limited liability corporation (LLC). Creating an LLC offers great benefits, including less paperwork and several tax advantages. However, actually making the LLC is a bit more complicated and regulations can differ by state, so it is a good idea to hire a formation service to get you started. Zen Business can help you with this crucial step, so contact the Zen Business phone number at 844-493-6249.

Appeal to Most Tenants

Now that you have your business details set in stone, it is time to get to work on your rental and make adjustments that will make it desirable to as many tenants as possible. Start with good curb appeal. Everyone wants to return home from work to a gorgeous home where the grass is cut, shrubs are pruned, and the exterior of the home is without blemishes. If your rental needs improvements in these areas, make them now.

On the inside, it is wise to not have any rooms painted in radical colors that may turn off potential renters. Instead, go for neutral colors like white and gray that will appeal to most people that walk in those doors. Your rental agreement should be specific as to the rules you have if renters want to paint the walls a different color, such as requiring that they be returned to their original color if the renter moves out.

Focus On Kitchens And Bathrooms

Experts say that the kitchen is the heart of the home, and that will be the case for renters as well. This is where families gather to eat dinner and talk about their days. It is also where many people entertain their guests. So, clean the kitchen and make repairs where necessary. Also, consider installing new appliances that will create convenience for renters.

Bathrooms are another big selling point for renters and homeowners in general. People will be immediately turned off by a dirty bathroom with faulty toilets and sinks. Make necessary repairs, add a fresh coat of paint, and redo the bathroom tile to make it as presentable as possible.

As you can see, renting out a property will take some work up front, but the profits you bring in could be exponential. If you need help pricing your rental or are interested in current trends, contact Housing Price Trends at 951-400-5045.

This article was gratefully submitted by Jackie Waters of hyper-tidy.com

 

Housing Price Trends Posts 2Q2021 Results

Housing Price Trends has updated the price charts with 2Q2021 Housing Price Index data. For this quarter, there were 40 BUY signals and 5 SELL signals. There were 11 BUY signals and 1 SELL signal (Binghamton, NY) in the top 148 cities in which to invest, and 29 BUY signals & 4 SELL signals other than in the top 148 cities. Remember the BUY signals that occur outside of the top 148 cities are not as meaningful, since those cities have prices that generally go up and down on much smaller amounts.

The volume of BUY signals in the top 148 cities is only slightly less than the  previous quarter. Adding the last 2 quarters together, there were 95 BUY signals out of 148 cities. Obviously, the housing market is in unusual territory. The big question is "will we see a large number of SELL signals in the near future?" We live in volatile times. When you get SELL signals, you normally have some time to actually sell, since these signals usually trigger BEFORE prices actually fall. The Housing Price Trends system detects a change in price momentum; that's when prices increases slow down enough to matter, often before prices start declining.

If you buy during these times, you should not be surprised that your hold period is somewhat shorter than the past history. There are certainly still massive opportunities in the housing market; just add more caution to your investing.

 

Housing Price Trends Posts 1Q2021 Results

Housing Price Trends has updated the price charts with 1Q2021 Housing Price Index data. For this quarter, there were 45 BUY signals and no SELL signals. There were 19 BUY signals in the top 148 cities in which to invest, and 26 BUY signals other than in the top 148 cities. Remember the BUY signals that occur outside of the top 148 cities are not as meaningful, since those cities have prices that generally go up and down on much smaller amounts.

This is an extraordinary number of BUY signals. But we all know the housing market is affected by extraordinary conditions. Some of those influencing conditions are rent moratorium, stimulus money, building material prices and migration patterns. We will have to see if the rent moratorium actually ends at the end of June. It may not take much to pop this bubble: a raise in interest rates could be a start (1% rise in interest rates could drop prices by 10%).

 

 

Release of 2020 Zip Code Data

Housing Price Trends recently released the 2020 annual Housing Price Index Percent Change (un-adjusted for inflation) report. As indicated in the report, these data are considered experimental by the FHFA. We recently also added a second report of the same data sorted by the most recent year's change (sorted high to low).

Housing Price Trends Posts 4Q2020 Results

Housing Price Trends has updated the price charts with 4Q2020 Housing Price Index data. For this quarter, there were 25 BUY signals and no SELL signals. There were 9 BUY signals in the top 148 cities in which to invest, and 16 BUY signals other than in the top 148 cities. Remember the BUY signals that occur outside of the top 148 cities are not as meaningful, since those cities have prices that generally go up and down on much smaller amounts.

This is the highest number of BUY signals in the top 148 than we have seen in a few years.

As the end of some government housing assistance programs approaches, and with the uncertainty of future programs, the housing market could be in for some future turmoil. It would be wise not to read too much into the high number of BUY signals, as the unusual economic conditions, job uncertainty and uncertainty in future interest rates all create more than normal pressures on the housing market.

 

 

 

 

The one chart that tells you all you need to know!

If you are not yet convinced that a long-term hold of residential property may not be the best investment, then this chart should convince you. This is the chart of the overall US Housing Price Index, adjusted for inflation. The dashed line is the linear trend line for the chart period. Over a 45 year period, the inflation-adjusted HPI went up 155%, or 3.4% per year. And that's using the "official" CPI data; and we know the Bureau of Labor Statistics constantly adjusts how they calculate the CPI (i.e., to keep it at a low number), so that the 3.4% annual return could actually be 0%.

For that same period the CPI went up 490%, which diminished the 758% increase of the HPI.

Excellent inflation-adjusted returns can be achieved in residential real estate, but you have to know when to BUY, in WHICH market, and when to SELL.

MORE ABOUT CPI:

While the official CPI published by the government is constantly manipulated to keep it low, the real-world CPI is higher. One source does this alternative calculation and comes up with a CPI about 2-3X the official CPI (http://www.shadowstats.com/alternate_data/inflation-charts):

As you can see from this chart, this divergence started around 1980.