Posted on 09/18/2020 8:59:34 AM PDT by SeekAndFind
On a ‘real’ (inflation-adjusted) basis, home prices declined Year-over-Year (YoY) in ONLY 7 of the 405 largest real estate markets nationwide.
That’s the strongest overall U.S. real estate market performance since just before the last real estate crash!
All the declining markets are in California or Texas.
(We’ve been warning you about many of the California markets for several years now even though other nearby states and regions had been looking strong.)
In the previous quarter, 17 markets had annual home price declines.
In addition to the list of declining cities below, we also use our Advance-Decline (A-D) Indicator that aggregates and tracks Market Breadth.
‘Market Breadth’ is a technique used in Technical Analysis (TA) that attempts to gauge the direction of the overall market by analyzing the number of markets advancing relative to the number declining.
Changes in Market Breadth can act as early indicators for changes in the market cycle.
#1 – When the red chart line is inside the green zone it’s a bullish – or positive – outlook on the overall market.
#2 – When the red line is in the middle zone it’s telling us there is no strong bullish or bearish direction; you must rely more heavily on market-by-market selections.
#3 – When the red line is in the bottom (red) zone, it indicates substantial weakness in the overall market.
This A-D Indicator can also be used on State and Regional levels for more granular insights. PRO level members can customize this Advance-Decline tool by logging in and visiting: Real Estate Market Breadth Analyzer.
Don’t get fooled by the low number of declining markets; some of our other Technical Indicators are looking weak… it just depends on the individual local market.
These are not normal times.
It could go either way in the coming months and quarters.
Investors need to pay close attention.
The only accurate way to analyze and anticipate local real estate market moves, especially in times like this, is with Technical Analysis (TA) and HousingAlerts.
‘Market Psychology’ will decide which markets are winners or losers, and only TA can track that driving force.
ONE data point, whether it’s for a Quarter or a Year, doesn’t necessarily mean it’s time to buy, sell or hold… or do ANYTHING different, other than pay closer attention. That’s where Technical Analysis (TA) comes in.
TA is a 500 year old science to help predict future market swings. TA is used by every Wall Street investment bank and every global stock, bond, currency and commodities trading firm on the planet for TRILLIONS of dollars in DAILY trades.
Readers digest version of this whole article is this snip:
These are not normal times.
It could go either way in the coming months and quarters.
Believe any appreciation at this point will be mainly due to depreciating value of the dollar against any given physical asset.
These are not normal times indeed.
Believe any appreciation at this point will be mainly due to depreciating value of the dollar against any given physical asset.
I’d like to return to five cent candy bars, but not sixty cents an hour. ;)
LOL. So, if I read your synopsis right, the market could go up. Or down.
Is that right?
Covid screws up everything. We won’t know what a normal real estate market looks like again until we are back to whatever new normal we end up with post-shut downs. Only then will economic activity get back to some semblance of normalcy along with mobility trends. People are really hunkered down right now, except those fleeing Covid and paying anything to get a house where they think they are safe and away from the disease and away from rioting.
It is anything but normal right now.
Interest rates will be low from now until kingdom come, or until the impending financial collapse/hyperinflation. Whichever.
Nobody knows what normal looks like right now.
I'm going to go out on a limb and say it could go either way.
Or the opposite. Yep. :)
You forgot to say prices may also remain flat. :)
The sun rose in the east today. The geese are headed south. My flowers are looking sickly. The mornings are very chilly.
Seems normal to me.
Victoria TX: Note that two years ago, Hurricane Harvey stalled over Victoria for more than a day, and caused much havoc. No wonder it’s housing values declined. It’s amazing that it was well under one percent.
College Station TX: Home of Texas A and M university. No more needs to be said.
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