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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