Here is the full report behind the CNN article I discussed in my last blog entry. I found this online at http://www.realtor.org/Research.nsf/files/MSAPRICESF.xls/$FILE/MSAPRICESF.xls. There is another site for me to bookmark and read regularly. Straight from the horse's mouth, so to speak. Here are home values in Salt Lake from 2004 through 2007 Quarter 2 (in thousands of dollars):
Salt Lake City, UT
2004 = 158.0
2005 = 173.9
2006 Quarter 1 = 203.0
2006 Quarter 2 = 191.2
2006 Quarter 3 = 216.3
2006 Quarter 4 = 223.6
2007 Quarter 1 = 218.0
2007 Quarter 2 = 233.1
Total Change 2006 Q2-2007 Q2 = 21.9%
Some interesting observations from the full report:
* In 2004, the median home price nationwide was $195,200. In Utah (the Salt Lake Metro region, but that takes a long time to type, so let me simplify here...) the number was $158,000, a whopping $37k below the national average. Three years later, Utah is a mere $700 below the national average--but STILL below the national average. This supports my theory (expressed at http://www.utahcountymommies.com/) that Utah is not spiraling toward huge home drops, but merely catching up with the rest of the nation.
A good point was brought up, however, concerning wages. Have Utah wages risen in a commensurate manner? The answer is confusing because (a) we don't know the size of homes being sold in the above info. The prices could have risen from actual price inflation, or merely because more luxury homes were on the market. We don't have the information to sort that out. So before we jump to conclusions, let's remember: we can't jump to conclusions. :-D
I wonder if anybody has information available to the public that states what the same home would sell for in the two different periods? Hmm.
* Is Utah "overpriced"? Well, by definition I have to say no because that is simple economics: if people are willing to pay the price, then it's the right price. Supply and Demand. This isn't like an oil cartel where the average person has little control over prices, so the market is free to adjust as needed. Again, I'm oversimplifying and I realize that, but it's still a valid consideration if nothing else.
One other factor in favor of Utah being reasonably priced is how we stack up with nationwide home prices. While we have enjoyed huge gains in recent years, we are relatively similarly priced with other markets. I put together a little chart to demonstrate. You can view it at http://www.geekuniverse.org/medianprices.pdf. Utah is #45 (of 149) on this chart with a median value of $233K. So we're in the top third, yes, but things are pretty level on the bottom half. I need a statistician to figure out the standard deviations!
* I expected to see home prices plunging in the most bloated markets, with prices gaining in underpriced markets. Now, obviously, there are a lot of factors that could be considered, but something jumped out at me: there is no correlation at all. The top 11 markets in the nation actually continued to gain value during the previous year! Still rising! Let's look at #1, San Jose-Sunnyvale-Santa Clara, CA (five of the top six are in sunny CA):
San Jose-Sunnyvale-Santa Clara, CA
2004: 698.5
2005: 744.5
2006 Q1: 775.0
2006 Q2: 795.0
2006 Q3: 779.0
2006 Q4: 760.0
2007 Q1: 788.0
2007 Q2: 865.0
% change 2006 Q2 - 2007 Q2: 8.8%
Overall change 2004-2007: close to 25% without a single drop.
The metro area with the steepest drop in home values was also the cheapest home segment in the nation: Elmira, NY:
Elmira, NY
2004: 78.8
2005: 77.1
2006 Q1: 86.8
2006 Q2: 87.3
2006 Q3: 93.6
2006 Q4: 78.4
2007 Q1: 75.3
2007 Q2: 71.7
% change 2006 Q2 - 2007 Q2: -17.9%
* Home prices have risen in Utah (on average) $75,100 between 2004 and the middle of 2007. This is a 47% increase from the original price in a relatively short time. How does this compare to other parts of the nation? The top 10 cities in the nation gaining value from 2004 to 2007 Q2 (total) are:
56.58% Boise City-Nampa, ID
56.31% Phoenix-Mesa-Scottsdale, AZ
56.30% Orlando, FL
55.22% Ocala, FL
53.86% Virginia Beach-Norfolk-Newport News, VA-NC
53.85% Spokane, WA
50.34% Cumberland, MD-WV
50.00% Farmington, NM
47.53% Salt Lake City, UT
47.41% Salem, OR
To summarize: The deeper you dig, the deeper you want to dig. More on this later?
Hey fellow nerd!
ReplyDeleteSo nice to read your blog as it is intelligent and witty and both traits seem to be lacking in my own neighborhood. You mentioned you needed a statitician to help with standard deviations. Excel will do it for you. Use formula STDEVA(val1,val2...) on your data. I can't tell what the numbers are in your graph or I'd do it for you. :) Check out my comment on The Book Thief as well. :)