David Carr New Haven Milford Ct Metro Value Shelf Report ending 4Q2018
The Federal Housing Finance Agency (FHFA) reported today, February 26, 2019, that Connecticut posted the 2nd smallest annual appreciation at 0.9 percent in home prices between the fourth quarters of 2017 and 2018 while values rose in all 50 states and the District of Columbia.
Multiple factors may be considered when deciding to invest in Connecticut Real Estate in 2019, however lack of relative over-appreciation does not seem to be a primary concern. According to the FHFA HPI Calculator today, a $100,000 New Haven Milford Metro property purchased in 1Q2012 would be worth $112,296 today.
My home market, New Haven-Milford, CT placed in 222nd national position with a one year appreciation of 2.08%, a small decline from position 216 in 3Q2018 when the annual appreciation was reported to be 3.10% Since 2014, the “Carr New Haven Milford Metro Value Shelf©” has maintained and appreciated beyond the original established range of 173-178 based on the FHFA All-Transactions house price index, which adds appraisal values from refinance mortgages to the purchase-only data sample. Historical observations are available on my platforms.
Connecticut real estate values in this sample appreciated 7.43% in the past 5 years and over 75% since 1991, yet your target market and property preference may be different, something I am available to investigate with you, using a variety of data tools that target where and what you are most interested in. You may have heard “New is national, but real estate is local,” so choosing the data configuration and unbiased source appropriate for your unique position and goal is essential. In my experience, real estate is hyper local, drilling down to school district and geographical boundaries, affected by a variety of community resources and local factors.
As we consider our Connecticut One Year House Price Appreciation we see Bridgeport-Stamford-Norwalk up 0.91% and Hartford-East Hartford-Middletown up 0.50% in the “20 Metropolitan Areas with Lowest Rates of Appreciation” holding national positions 235 and 239 respectively, out of a total 246.
The top five states in 2018 annual appreciation were: 1) Idaho up11.9%, Nevada up 11.2%, Utah up 9.8%, Georgia up 8.2% and Arizona up 8.2% while the top five metros were Las Vegas-Henderson-Paradise, Nevada up 17.63% , Boise City, Idaho up 16.65%, Idaho Falls, Idaho up 13.78%, Spokane-Spokane Valley, Washington up 13.08% and Coeur d’Alene, Idaho up 12.85%. This demonstrates a huge appreciation differential for Connecticut, which I propose is undervalued considering deferred appreciation since 2012, our close proximity to New York City, New England, the Long Island Sound Shoreline, our quality of life, recreational resources, schools, health care and a relatively hospitable climate. It’s important to remember the FHFA House Price index is constructed to reflect the weighted average quarterly price change for the fifty states and Washington, D.C. The weights are the estimated share of one-unit detached housing units in the respective states.
At the peak of Irrational Exuberance in New Haven-Milford, house price values peaked ending 1Q2007 at 220.41 (with a 1.46 standard error). We can observe the 2014 bottom of the Great Recession in my Milford New Haven Metro as reflected here in the FHFA All-Transactions Indexes, estimated using sales prices and appraisal data not seasonally adjusted. The number in parentheses is the standard error.
“New Haven-Milford, CT” 2011Q1 181.66 ( 1.22) 4Q2018 Equity Point
“New Haven-Milford, CT” 2011Q2 177.88 ( 1.21)
“New Haven-Milford, CT” 2011Q3 178.89 ( 1.20)
“New Haven-Milford, CT” 2011Q4 179.74 ( 1.18)
“New Haven-Milford, CT” 2012Q1 176.96 ( 1.17)
“New Haven-Milford, CT” 2012Q2 174.5 ( 1.16)
“New Haven-Milford, CT” 2012Q3 174.76 ( 1.16)
“New Haven-Milford, CT” 2012Q4 175.05 ( 1.16)
“New Haven-Milford, CT” 2013Q1 174.95 ( 1.17)
“New Haven-Milford, CT” 2013Q2 174.67 ( 1.18)
“New Haven-Milford, CT” 2013Q3 174.36 ( 1.21)
“New Haven-Milford, CT” 2013Q4 173.04 ( 1.29)
“New Haven-Milford, CT” 2014Q1 171.51 ( 1.33) BOTTOM
“New Haven-Milford, CT” 2014Q2 171.75 ( 1.28)
“New Haven-Milford, CT” 2014Q3 172.44 ( 1.26)
“New Haven-Milford, CT” 2014Q4 173.05 ( 1.26) BEGIN 173-178 SHELF
“New Haven-Milford, CT” 2015Q1 175.54 ( 1.29)
“New Haven-Milford, CT” 2015Q2 176.04 ( 1.31)
“New Haven-Milford, CT” 2015Q3 175.24 ( 1.33)
“New Haven-Milford, CT” 2015Q4 175.95 ( 1.37) BEGIN 2nd Year
“New Haven-Milford, CT” 2016Q1 175.31 ( 1.38)
“New Haven-Milford, CT” 2016Q2 177.17 ( 1.36)
“New Haven-Milford, CT” 2016Q3 178.21 ( 1.31)
“New Haven-Milford, CT” 2016Q4 178.24 ( 1.34) BEGIN 3rd Year
“New Haven-Milford, CT” 2017Q1 177.28 ( 1.52)
“New Haven-Milford, CT” 2017Q2 178.03 ( 1.44)
“New Haven-Milford, CT” 2017Q3 178.69 ( 1.44)
“New Haven-Milford, CT” 2017Q4 181.21 ( 1.47) BEGIN 4th Year and
“New Haven-Milford, CT” 2018Q1 181.09 ( 1.65) end 173-178 SHELF
“New Haven-Milford, CT” 2018Q2 182.76 ( 1.55)
“New Haven-Milford, CT” 2018Q3 184.88 ( 1.64)
“New Haven-Milford, CT” 2018Q4 184.98 ( 1.82)
As we move ahead or look back, we may notice the velocity with which values evolve. Here we see 12 quarters over 3 years with five points appreciation forming the Carr Value Shelf©. The next 5-point appreciation from179 -184 has been in process about half that time over 5 quarters. The last tme we saw this demonstration of price stability with delayed appreciation was the seven-year period from 2Q1991, when this index was at 110.78 (0.75) to 4Q1998 when the index rose to 111.38 (0.72).
As a licensed real estate professional since 1997, I find it interesting to consider when there is a point of stability compared to a rising value environment. It’s unique that real estate is controlled with dedicated shelter money in a leveraged transaction that may have tax benefits, so one can either pay rent or a mortgage. It seems to me there is a definite amount of inventory in New Haven-Milford, CT that has maintained value since the 181.66 (1.22) equity point established in 1Q2011, and before 3Q2004 when the FHFA HPI was 186.34 (1.21).
Moving ahead, this is a reasonable data set to consider when weighing 30 year interest rates in 5% in a non-inflationary environment. When I wrote #HomeOwnershipBuildsWealth© an example was presented comparing renting to buying over 30 years. This study concluded in the 31st year the tenant would be signing a new lease while the homeowner who bought the $275,000 property would probably have an asset worth over $550,000 when projecting 100% appreciation over 30 years. I hope you have found this interesting and helpful. It seems to me that Connecticut is a superior location to New York or New Jersey for a variety of reasons including schools, density and quality of life. I look forward to working together to help you make the right move when the time is right for you. I am proud to be the foundation of your success in real estate since 1996. This work is my own reflection of FHFA public data, presented in the public interest. I am happy to explore any ideas you may have. My work and the referenced data sets are Copyright©2/26/19. All Rights Reserved. Follow me on Twitter @ ctrealdavecarr. See on on YouTube at David Carr Milford New Haven Real Estate.