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Thursday, November 7, 2019

HOW LONG WILL ECONOMIC EXPANSION CONTINUE?


Economic business cycles, measured for 165 years in America, have never lasted more than 10 years, until the current expansion.  “The economic recovery that began mid-2009 set a longevity record as it entered July 2019, and the recovery is expected to continue at least into next year.

“The current expansion has created more than 20 million jobs, raised family incomes and rebuilt consumer confidence.  The CoreLogic Special Report: The Role of Housing in the Longest Economic Expansion, these economic forces have driven a recovery in home construction, prices and equity.”

After the dust settled from the financial crisis in 2008, home prices began to recover in 2011 and have continued to date.  The CoreLogic Home Price Index for the U.S. has recorded a 59% increase in prices since January 2011. (see chart below).  Of course, we must not forget that homes prices fell drastically in 2008-2009, so part of the increase in prices was actually recouping what had been lost. 

A recent article in Newsday, reported Long Island home price increased 4.2% for the 3rd quarter, but the number of sales for the year fell 1.3%.  The luxury market (those selling for over $1.1 million) reported a decrease of 3.6% in median price for the 3rd quarter.  Clearly, the luxury home buyer is more price sensitive, at this time, and sellers have been adjusting their prices to encourage sales.

The important take away here is that home prices must respond to market pressures. The environment is dynamic- sellers and their realtors must be vigilant.  At Beninati Associates, we keep our eye on the market.  If you are thinking of buying or selling, call us at 631 765 5333, we’ll give you an up to date assessment of market conditions and help you develop a market strategy for your sale or purchase.


Sources: Economic Expansion Reaches Milestone, CoreLogic, October 16,2019; Newsday, “Surge in LI Home Prices,” October 25, 2019, page A33.



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