Housing Price Trends Posts 3Q2020 Results

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.