Housing Price Trends Posts 3Q2022 Buy-Sell Results

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Not too surprised that there were NO buy or sell signals at the end of 3Q2022. All 404 cities went up in price (adjusted for inflation, as we always do) except for Odessa, TX (-2,24%) and Enid, OK (-0.97%).

The USA market as a whole tells the story, a pause and slight decline:

Many real estate dynamics are at play: inventory, new build coming on the market now and much more soon, interest rate changes....

Buy savvy real estate investors know that you need to focus on trends in a specific local market; that's where the investment fortunes are made. Let's take the "West Palm Beach-Boca Raton-Boynton Beach, FL (MSAD)" market, for example.

The inflation-adjusted appreciation in the last 4 quarters was 19.3%. There was a Buy signal in 3Q2013 at an HPI index of 188.85 and the current HPI index is 503.75. If you sold now, you would have achieved an annual inflation-adjusted appreciation of 63% (yes, per year).

Housing Price Trends Posts 3Q2020 Results

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Housing Price Trends has updated the price charts with 3Q2020 Housing Price Index data. For this quarter, there were 8 BUY signals and 5 SELL signals. However, only 3 BUY signals (Glens Falls, NY; Atlantic City-Hammonton, NJ; East Stroudsburg, PA) occurred in the top 148 cities in which to invest, and 1 of the 5 SELL signals occurred in the top 148 cities (Odessa, TX). 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 average inflation-adjusted annual return for the Odessa, TX area was 20.6%. It cannot be stressed enough to evaluate "inflation-adjusted" returns in your investments. There is a significant effect of inflation over time.

If you are a paid subscriber, you will note that Midland, TX has a SELL signal this quarter. If you compare to last quarter, you will also note a SELL signal for 2Q2020. So, what is going on? The FHFA slightly modifies their data collection on occasion. These changes are typically minor, but can affect a signal. In the Midland, TX market, for example, the inflation-adjusted HPI was 1.25% in the 2Q2020 report, and 1.22% in the 3Q2020 report. Following the Housing Price Trend system, you would have sold following the 2Q2020 report, and that would have been correct.

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.