Archive for the 'National and Local Real Estate Appreciation Forecast' Category
Out With The Old; In With The New.
January 3rd, 2009 Categories: National and Local Real Estate Appreciation Forecast
Some areas of Ventura County really took it on the chin in 2008, especially the last quarter of the year.
Ventura Beach properties did remarkedly well in the year 2008 (appreciating about 12%); all other Ventura County areas were hit with a -12% to -57% decrease in property value.
Fillmore was hit extremely hard with a -57.2% (yes that is a negative sign) decrease in values between the period of year 2007 and the end of 2008. Why?
Ojai/Oak View, Santa Paula, parts of Oxnard and of course Fillmore have had high foreclosures and lending institutions and appraisers have been low balling values in these communites for quite some time. Lenders perceive these areas as too risky.
Not all was bad. As noted in the following chart over the course of the last 15 years Ventura County has done well in maintaining property values. Over this time span Ventura County has enjoyed approximately a 10% annual growth in property values.
Even with the sharp declines witnessed during 2008, prices today resemble prices in the County for the years of 2003 and 2004 (which ranged in the $ 460,000+ to $ 579,000 price area). As noted on the chart there were three years of 25% appreciation in the County before signs of an adjustment starting to take place (starting in 2005).
What is in store for the County in 2009? As noted in the first chart above Ventura County will have an appreciation rate increase of about 8% ending in the year 2009.
This estimate is based on 3rd quarter, 2008 information issued from the Office Of Housing, Washington, D.C. Yes there will be some adustments when the 4th quarter information is released but the change should be insignificant.
Should unemployement exceed 10-11% in the County and job creation is zero or negative then there will be a significant impact to the numbers. But it is not expected that unemployement will reach 11%.
Noted in the graph below is the expected growth for the County into the year 2022. The year 2009 should be a good year.
After that just watch out. In 2020+ prices will exceed prices set in the 2005-2006 time frame. Gads! If I can live to 2020+ and see if all of this really happens will be great but the numbers suggest that the Ventura area will start an upswing with a vengence around 2014. Prices in 2020+ will probably double the 2005-2007 prices we have just witness. So hang on it is going to be a great market.
For those of you interested in areas outside the State of California or other California sectors the next table shows the expected price appreciation for these areas. So if you are an investor prepare yourself for some good investment opportunities starting in 2009.
Outside of the State of California, Boston, Detroit, Phoenix and Reno look like they may be good investment areas.
But……invest in areas where you would like to live. Who knows….circumstances may change and you may see yourself having to live in Boston or Detroit.
One of my tenets for investing is to invest in areas that I might have to live in and the second part to that is to buy only NEW anything. I do not want to inherit somebody else’s problems. By buying new I know that the problem didn’t exist before and while that may be some consolation (for me) I recognize that whatever the problem may be the correction, cost wise should be minimal (I hope).
Directing attention to areas in California. Chico, San Luis Obispo, Santa Barbara and of course Ventura County appear to be good places to invest. The problem I see in these areas will be “can one break even monthly” or will they be faced with a negative monthly cash flow.
Again one has to take pencil to paper and figure it all out. What looks golden to one may be a rotten egg to another.
Your comments are welcomed.
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National and Local Real Estate Mood
August 26th, 2008 Categories: National and Local Real Estate Appreciation Forecast
Trying to view the future is at best an art and attempting to project what real estate will be doing requires an eye for trends and keeping your fingers crossed that it will hold together.
Economic variables such as what the farm belt harvest will be, interest rates and controlling inflation has an impact on any forecast.
Then there is the political arena(it is that time of year) and what other countries economies will do.
Oil appears to be every-one’s favorite commodity and anything that interferes with oil will create a problem for the world.
So attempting to make a projection is like predicting the weather. Many want to make it sound like a science but in fact it is an art. Similar to weather forecasting.
Only after time has passed does one know if his/her “art” was close to the mark.
The reported second quarter, 2008 National real estate map reflects the real estate mood throughout the United States. The overall appreciation rate approximates 5% (greenish-blue area) average throughout the country.
The biggest difference between the 2nd quarter and 1st quarter, 2008 quarters is the decrease in real estate values is the North Central portion of the United States in areas of Ohio, New York, Minnesota, etc.
And yes Arizona has picked up some…..nothing great but it did get out of the red.
Looking at California, the areas with the lowest rate of appreciationfor the 2nd quarter, 2008 continues to be (this is a recording) Merced, Stockton, Modesto, Salinas, Vallejo, Riverside/San Bernardino area, Bakersfield, Fresno and Madera.
Santa Barbara, Goleta and Santa Maria are in the lower quadrant for appreciation but that is going to change rather rapidly.
When one looks at the following National real estate maps there have been a few changes and California, Nevada and Florida continue to show accelerated decreases (greater now than at the beginning of the year).
Areas of Texas, New Mexico, Oklahoma, Washington, Utah, Wyoming, Montana, etc., have definitely cooled as reported in the last update.
Oklahoma still appears to be a good place to invest although I am beginning to sense that it too will cool off shortly. Tulsa and Oklahoma City are good areas.
I think that California is starting to come out of its down turn but the numbers have yet to catch up with this judgement. I suspect that we will definitely see a significant change in California by the end of the 3rd quarter, early part of the 4th quarter of 2008.
Closer to home, Ventura County, and other California cities it is going to be UP.
As mentioned it appears that California will be coming out of its downside by the end of this year. This chart reflects some of the area growth over the next year and two subsequent years.
Ventura County will be enjoying a hearty increase surpassed only by San Luis Obispo area.
Los Angeles and San Bernardino will not be participating as other areas but they too will be showing positive growth.
This is the mood of the United States real estate at the end 2nd quarter,
This was the mood of the United States real estate during the 1st quarter, 2008.
This was the real estate mood during the 4th quarter, 2007.
For investors it is go Southeast young man, go Southeast but stay out of Florida.
Your comments are welcomed.
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Sizzle….Fizzle….Sizzle
August 10th, 2008 Categories: National and Local Real Estate Appreciation Forecast
The above chart shows the completion of the last real estate cycle with the bottom occurring around June, 2008. There can be some residual downside but for the most part the bottom has been set for Ventura County.
The next cycle has already started and based on data from Ed’s Forecast for the next five years and my own interpretation for the following years after thru the year 2022, Ventura County is going to do very well.
If economic events do as they have done in the past a property selling for approximately $ 465,000 today will appreciate to approximately $ 1,000,000 plus by the year 2022. At that time the cycle will start over again.
It is like being on a roller coaster. Sit back and enjoy the ride.
Save this and let us see what happens.
Your comments are welcomed.
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Happy Days Are Here Again…..
July 19th, 2008 Categories: National and Local Real Estate Appreciation Forecast
Constantly all one hears or reads today is what is wrong with real estate.
Sales, mortgages, lenders, brokers, inventory have all had their share of headlines.
BUT the numbers show a different story.
A recent article in Barrons (July 14, 2008) entitled “Bottom’s Up: This Real-Estate Rout May Be Short Lived” by Jonathan R. Laing suggests that the pessimism that one read in the papers or hears on the news is overdone based on recent data.
Mr. Laing notes that sales of existing homes are showing tentative signs of increasing while the plunge in prices likely is nearing an end and inventories are getting smaller.
The chart below concurs with Mr. Laing’s observation that the “rout” may be over. Real estate has turned the corner for most parts of the United States. California is about ready to take off.
Properties in San Luis Obispo, Santa Maria, Santa Barbara, Ventura, Santa Paula will have significant appreciation over the next 36 months. 26% to 36% growth in 36 months is excellent growth. It does not get any better.
The areas just mentioned will experience a 7%+ annual growth over the next 12 months. Where can you get 7% on your money today? Banks? No! The stock market? Maybe. Commodities? Watch out.
It is readily apparent that all areas of California will be headed upward and will be a good investment. My God, look at San Diego, Chico, Redding and yes, San Bernardino. All are showing growth.
Hawaii will not share in this upswing. They have other “island type” problems that the rest of the United States doesn’t face (tourism is their major business. Travel will be difficult for the immediate time and unless a “fuel cure” is found instantly travel will be minimized by people for a significant period. Therefore Hawaii will suffer).
California has turned the corner. So the continued negative media coverage of real estate is mystifying. I guess that old adage “negative news sells” is alive and well.
Prices are at a point now that young people can afford to purchase a home.
Over the next 36 months, especially along the coast line, property values are going upward (some will say prices are crazy).
This is not a crystal ball assessment but a statistical evaluation of what is projected based on current economic, jobs, and federal figures collected from across the United States.
In a recent article “66 Cities Where Buying Makes Sense”, dated July 15, 2008 by Marilyn Lewis, MSN Real Estate, lists a number of cities that she thinks that if somebody wants to buy a home, these are the areas that make sense.
Her recommendations include Edinburg and a number of other cities in Texas; New Orleans, LA; Tulsa, OK; Detroit, MI and yes a number of areas in Florida.
Ms. Lewis also notes that despite the drop in home prices, long-term buyers in the top 20 U.S. metro markets have seen their property appreciate by 70% since the year 2000. Over an 8 year period that is an annual appreciation rate of 8.75% each year for 8 years. That is great when compared to the National average of 7.0%.
All the negative news about mortgage lenders, real estate sales, inventories in a few weeks will have all but disappeared.
Within the next year we will start hearing the chorus that homes are not affordable and the cycle begins again.
If buyers who have been waiting for the bottom have not acted by now, well they have just missed the train. As shown in the article: http://www.venturacountyretalk.com/2008/05/05/it-only-gets-better-we-are-on-the-upsidea-historical-perspective-of-home-prices-in-ventura-county-and-what-can-be-expected-in-the-next-10-years/ the California real estate market is going to be great.
Up……Anyone?
Your comments are welcomed.
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May, 2008 Selected Cities Real Estate % Appreciation Trends Report
June 1st, 2008 Categories: National and Local Real Estate Appreciation Forecast
Changes are happening. A review of the latest OFHEO (Office of Federal Housing Enterprise Oversight) report listed the following cities as the highest ranking but not necessarily the best investment areas. The general areas are:
- Houma-Bayou Cane-Thibodaux, LA
- Grand Jucntion, CO
- Wenatchee, WA
- Autstin-Round Rock, TX
- Billings, MT
- Provo-Orem, Utah
- Anderson, SC
- Mobile, AL
- Ogden-Clearfield, UT
- Hickory-Lenoir-Morganton, NC
When viewing Quarterly Changes To United States Real Estate Landscape and coupling it with the list of cities noted in the table below it is evident that the real estate landscape has changed.
For real estate investments, dollar for dollar the areas to consider are Louisiana, Mississippi, Oklahoma, Texas (although it appears that this State may be starting to change downward) and Michigan (this State appears to be coming out of a depressed state and it appears now on an upward change).
If push came to shove and I was told I could only select one area to invest in, at this time it would be Oklahoma. Michigan is becoming a very interesting area but I would wait for about a year. Keep an eye on Michigan.
Oklahoma is selected because of the increasing job market, real estate taxes are reasonable, single family home prices are relatively low, and based on current rents the opportunity exists for a monthly positive cash flow.
There are a number of people that feel Idaho and Wyoming are the places to be so it becomes a personal preference. Properties in these area tend to be higher in price (5 to 20%) and with the higher down-payment money needed because the price variance, monthly cash flow could be a problem especially if home owner association dues are added.
Read the article How To Invest In Real Estate for added insights one should consider prior to investing in any location.
Specific cities which I track and their 12, 24 and 36 months projected trends are:
Restricting one view to California it appears that San Luis Obispo and Ventura are the areas with the greatest prospects for appreciation, followed closely by Santa Maria and Santa Barbara.
On the national scale Hawaii appears not to favor investors for the next several years.
Data for the above charts was derived from Ed’s Forecast.
Your comments to this article are welcomed.
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Quarterly Changes To United States Real Estate Landscape.
May 22nd, 2008 Categories: National and Local Real Estate Appreciation Forecast
The pictures tell the story.
The just released Office of Federal Housing Enterprise Oversight (OFHEO) report has shown changes to the United States real estate landscape.
Currently the picture of the National real estate market looks like this:
Previous Office of Federal Housing Enterprise Oversight (OFHEO) pictured the United States real estate landscape as this:
The areas of California, Nevada, Arizona and Florida continue to experience an accelerated weakness since the last report. California and Nevada saw price declines of more than 8%.
Within California the weakest areas continue to be:
- Merced
- Stockton
- Modesto
- Yuba City
- Salinas
- Santa Barbara-Santa Maria-Goleta
- Bakersfield
- Vallejo-Fairfield
- Riverside-San Bernardino-Ontario
- Sacramento-Arden-Arcade-Roseville
- Fresno
- Madera
Merced, Stockton and Modesto have shown the sharpest depreciation for the same period reported last year of above -21% or greater. Home prices in this list of areas will continue to decrease significantly for the next several months.
Areas of continuing appreciation growth (above 5%) are Wyoming and Utah. Other States with the greatest appreciation are Montana, Texas and Alabama. Although it should be noted that Texas has cooled significantly since the last report.
Most of the United States will experience a growth rate of between 2% to 5%. Areas of Texas, New Mexico, Washington, Alaska, Montana, North Dakota and Oklahoma have cooled over the last quarter but will continue to appreciate.
Minnesota, Michigan and the northeast section of the United States appear to be turning upward.
The OFHEO report noted that the purchase only housing index fell 3.1% between the first quarter of 2007 and 2008 but prices for other goods and services increased 4.6%.
It is expected that with continued food and fuel price increases United States real estate will continue to the downside, offering foreigners more opportunities to invest in this country.
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It Only Gets Better! We Are On The Upside…….A Historical Perspective of Home Prices in Ventura County and What Can Be Expected In The Next 10 Years.
May 5th, 2008 Categories: National and Local Real Estate Appreciation Forecast
Noted below is a chart that should give a perspective of real estate sales in Ventura County from 1999 through April, 2008.
From the data it appears that average sales prices when compared to what has occurred during the first 1/3 of 2008 are approaching real estate prices of the year 2004.
That would represent a 25% decrease in home average sales values using January-June, 2004 as a base for analysis. This averages to be about an annual 10% decrease in sales values for each year since January-June, 2004.
However it does appears that $ 550,000 is the baseline. In other words the lows of the market have been set, basing is now occurring and within the next 4-6 months prices should be on the upside.
Why do I think the base has been set? Simply because the list to actual sales price variance in 1999, the days on the market and actual average sales prices are similar to the price variances, days on the market and actual average sales prices that we are experiencing today.
Yes, if I expanded this study and added more years something else may turn this logic around but that is what I see based on the data presented.
Other studies that I have taken show that Ventura County average home sales will appreciate approximately 24% over the next 36 months. Therefore homes valued today in Ventura County at $ 550,000 will increase in value to approximately $ 682,000 by the end of 2010 or the first quarter of the year 2011.
Keep your hats on. That same home valued at $ 682,000 in 2010 will be worth approximately $ 1,100,000 (give or take a little) by the year 2016-2017. So the picture does get a lot better.
The current market (described as a Phase 1 of a 3 phase cycle which lasts about 10-11 years) that we are in should be completed in about 6 months. Smart buyers should be very active today because they will have missed the bottom shortly.
Phase 2 will show some growth (reference the above chart for the period 1998 through 2002) but phase 3 will show the greatest appreciation and this is the time that home owners wanting to sell should sell. As the variance of list to actual sales price approaches 3.5% one can expect that the market is topping and will turn around to the downside within one year.
If you view the above chart one could state that the greatest growth in the County occurred between January 2003 through 2006. This was the phase three of the previous market.
That’s it! I thought a perspective was needed for us to look at. Ventura County real estate has been very good in the past and will be very good in the future. Patience is required.
Your comments are welcomed.
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Keeping A Perspective: The United States Real Estate Landscape
February 26th, 2008 Categories: National and Local Real Estate Appreciation Forecast
The recent Office of Federal Housing Enterprise Oversight recent report shows that the red area (California, Nevada, Arizona, Florida, Michigan, Minnesota and Rhode Island) experience a home price range valuation decline of -1.0% to -6.6% during the 4th quarter, 2007.
Louisiana, Mississippi, Alabama, Tennessee, North Carolina, South Carolina (all areas within the blue-green areas) show a positive home valuation between 2.0% to 5.0%.
The dark blue areas have home valuation growth rates range of 5.0% up to 9.3%. The States within this valuation range include New Mexico, Alaska, Utah, Wyoming, Montana, Washington and North Dakota.
Overall approximately 3/4 of the United States real estate is showing positive growth.
Many of the places showing a decline will experience good appreciation growth over the next 36 months. Refer to the blog article “Feb 2008 major Cities Real Estate % Appreciation Trends Report”. Real estate is going to be good overall over the next 36 months. Just keep a perspective.
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Feb. 2008 Major Cities Real Estate % Appreciation Trends Report
February 26th, 2008 Categories: National and Local Real Estate Appreciation Forecast
Yikes……Now I know what it feels like swimming upstream in murky waters and everything is flowing against you.
But the numbers are what they are and despite all the doom and gloom one hears or reads the real estate market is going to be fine over the next 36 months.
All the places that have had bad press over the last several years appear to be on the upswing and in some cases with a vengeance. Even poor Phoenix, AZ appears now to be on the upswing.
The table below notes some major cities in various parts of the United States and the expected % appreciation of these areas over the next 36 months.
As mentioned in the December, 2007 remarks, it still appears that dollar for dollar the best investment areas continue to be the in the South (Texas, Missouri, Oklahoma, Mississippi, Louisiana to name a few).
California appears to have reached the bottom of the real estate cycle with areas such as Bakersfield, Fresno, San Bernardino now showing that they have seen the worse and will be on the upswing.
Still it will be a task to achieve a positive cash flow from investment properties in California. Accepting this one has the task to be alert as to location, employment, job growth, future job growth and other variables before investing. This is not only true for California but other areas as well.
But the trend is in place and California has an UP forecast for the next 36 months as well as many other areas in the United States.
Trend information was developed from edsforecast real estate model. This table has been update a month earlier than expected because of the Federal government early release of the real estate data.
|
Area |
Oct. 2007 |
Dec. 2007 |
Feb. 2008 |
Trend |
|
Outside California |
||||
|
Seattle, WA |
16.5% |
16.5% |
16.7% |
Flat |
|
Salt Lake City, UT |
7.8% |
7.8% |
11.9% |
Up |
|
Reno, NV |
-6.0% |
-4.5% |
5.8% |
Up |
|
Phoenix, AZ |
-6.0% |
-4.5% |
15.6% |
Up |
|
Portland, OR |
2.0% |
1.0% |
8.4% |
Up |
|
Boise, ID |
2.0% |
1.0% |
9.9% |
Up |
|
Cheyenne, WY |
8.5% |
8.5% |
13.3% |
Up |
|
Edinburg, TX |
36.5% |
36.5% |
30.6% |
Down |
|
New Orleans, LA |
16.5% |
16.5% |
11.1% |
Down |
|
Tulsa, OK |
13.5% |
13.5% |
13.4% |
Flat |
|
Branson, MO |
11.0% |
11.0% |
10.8% |
Flat |
|
Dallas, TX |
13.5% |
13.5% |
13.4% |
Flat |
|
Gulfport, MS |
12.5% |
12.5% |
14.3% |
Flat |
|
Detroit, MI |
8.0% |
9.7% |
8.7% |
Flat |
|
Honolulu, HA |
4.0% |
4.0% |
2.0% |
Down |
|
Chicago, IL |
6.0% |
5.8% |
4.8% |
Down |
|
Boston, MA |
1.0% |
1.0% |
18.4% |
Up |
|
New York, NY |
2.0% |
-2.0% |
7.6% |
Up |
|
Newark, NJ |
2.0% |
-2.0% |
7.6% |
Up |
|
California |
||||
|
Los Angeles |
-1.5% |
-1.5% |
3.7% |
Up |
|
San Francisco |
4.5% |
4.5% |
12.4% |
Up |
|
San Bernardino |
-5.5% |
-4.3% |
4.9% |
Up |
|
Fresno |
-1.0% |
-1.0% |
7.5% |
Up |
|
Bakersfield |
-3.0% |
-2.1% |
7.5% |
Up |
|
San Diego |
-4.0% |
3.7% |
6.8% |
Up |
|
Redding |
3.5% |
3.9% |
12.8% |
Up |
|
Ventura |
1.0% |
1.0% |
24.4% |
Up |
|
Santa Barbara |
-3.0% |
-1.7% |
21.4% |
Up |
|
Santa Maria |
-2.0% |
-1.7% |
21.4% |
Up |
|
San Luis Obispo |
4.5% |
4.5% |
36.9% |
Up |
|
Santa Paula |
1.0% |
1.0% |
24.4% |
Up |
Areas with the highest rate of house price apprciation are: Wenatchee, WA; Houma-Bayou Cane-Thibodaux, LA; Grand Junction, CO; Odgen-Clearfield, UT and Bismark, ND.
The five lowest rates of house price appreciation are: Merced,CA; Modesto, CA; Stockton, CA; Port St. Lucie, FL; and Punta Groda, FL.
The report also shows that Oxnard-Thousand Oaks-Ventura, CA being a part of the lower 1/3 of areas listed with the lowest rate of house price appreciation.
This appears to be at odds with the table showing Ventura County projecting a 24+% growth over the next 36 months. My reading of these numbers is simply that the bottom is in place, there will be some up’s and down’s over the next several months but it appears that the worse has been put behind us.
IF (there always has to be an IF) the overall economy goes beserck than the formula changes. But it appears that the economy for Ventura County will on the upside.
California, Nevada and Florida continue to be the areas with the lowest % of house appreciation. The highest % house appreciation are in the States of Utah, Wyoming and North Dakota.
Send me your comments.
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Major Cities Real Estate % Appreciation Trends.
January 12th, 2008 Categories: National and Local Real Estate Appreciation Forecast
This listing has been developed with real estate investors in mind. Others may use it but the focus is on investments.
Listed are some major cities in various parts of the United States and the expected % appreciation of these areas over the next 36 months.
Dollar for dollar it appears that the best investment areas will be the South (Texas, Missouri, Oklahoma, Mississippi, New Orleans, to name a few states). It is in the South where on can still purchase good investment properties for approximately $ 125,000 to $ 175,000 with a chance at some positive cash flow.
California appears to have reached the bottom of the real estate cycle with most areas now showing good appreciation over the next 36 months. However it will be a daunting task to achieve a positive cash flow in California. One has to be extremely alert as to the location and other factors such as employment, area growth and the like.
Trend information was developed from edsforecast real estate model. This table will be updated quarterly.
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