OfflineMany real estate investors are aware of the FHFA (Federal Housing Finance Agency) and the Standard & Poors Case-Shiller Home Price Indexes. There’s another reporting company out there, Altos Research. Here’s how they describe their function and their monthly report product:
“This report identifies housing market trends across the country and it looks at statistics on over one million properties currently listed for-sale in 26 metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Indianapolis, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, Salt Lake City, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, DC.”
Here are some bullet points from their most recent report issued this month:
- The Altos national index median price was $440,194 in April, up 1.82% from $432,307 in March.
- Austin, Boston, Philadelphia, San Francisco, and Washington D.C. all showed double-digit inventory increases.
- Boston posted the biggest inventory increase at 19.18%.
- The leaders in the price increase category were in “Sunshine States” – San Francisco (4.87%), San Jose (4.32%), Phoenix (3.30%), Denver (3.23%), and DC (3.04%). The 7-day and 90-day averages are both trending upwards for median prices and inventory. The 7-day trends are always the first indication of a shifting market and should be watched closely.
- Prices were flat in New York, Philadelphia, Portland, Salt Lake City, Seattle, and Tampa.
- Las Vegas and New York were the only markets showing a decrease in inventory, and the decreases were modest (-1.05% and -0.26%, respectively).
This is a good resource, as it’s not about sold prices. It’s about currently listed inventory, and inventory levels and their trends can at times give us a clue as to the near to intermediate future market trends for prices.
But you have to be careful using it as it is a forward predictor of prices based upon listings, not sales. By nature, this indicator will always be more sunny than reality because real estate agents always list at the top end (or above top end) which skews the results. I would use this tool when I am talking to a buyer to pump up my position but I wouldn't use this tool when talking to a seller or when making investment decisions.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
Spot on Bill about recognizing this is only a tool for understanding Inventory Changes. The interesting part is how you can compare this with the Bid/Ask price of Silver Spot prices and the actual price that Dealers will buy/sell Bullion. On average the Sell price of Silver American Eagles is 15-20% above the current Spot Price and with the recent fluctuations more Dealers are staying at $50 to sell a 1 troy ounce Silver American Eagle.
When Comparing this to Real Estate instead of looking at house prices in dollars compare it to Silver. If the median average is $440K in those 26 metropolitan areas then it would take about 11,000 coins to buy that property.
Now for the interesting part. Silver is at an extremely cheap price compared to Gold. This is an idea that not to many are keen to but does provide an opportunity that will be talked about for centuries so that it can be repeated again.
Why is Silver so Cheap? Well historically Silver had always been priced at a ratio of 1:12 of Gold. The physical reason had been from physical known resources that were being mined at the same rate. 1T of gold mined in a day and 12T of Silver mined in a day. In the 60's Silver stopped being used for coinage and consequently silver was being consumed less by minters and at the time its Industrial uses were just being realized. Gold Also was not being minted for coins and is primarily used for Jewelry.
Fast Forward to now and Silver is roughly only 1/3 the availability of Gold yet its buy price is 1/37 that of Gold!
Silver also has much more Industrial use than Gold and due to its insanely low price when you throw away your cell phone, appliances, mirrors, and etc it is thrown away and not recycled! The reclaim price compared to how much silver you would get does not make it a feasible operation. This just means that Silver will become more rare compared to gold. Gold is still being mined because of its sell price, silver is not being mined nearly as much because of its sell price compared to mining operation costs.
Okay so with that being said here is the opportunity. When the US currency system crashes and the Treasury begins to print $1,000,000 million dollar bills (whose face we gonna put on that one?) What will the price of silver be and what about the Median Home price? Will it reflect the inflation of the dollar or will it skyrocket down? Silver has the potential for a brief moment of time to skyrocket to a ratio that dwarfs Gold based on the availability ratio.
So if Gold skyrockets to $15,000 per ounce silver has a potential of hitting $45,000 based on the availability ratio. Say the Median Price home is now $4M, it would only take 89 silver ounces to buy a Single Family Home.
Today it takes $3,600 to buy 89 ounces of silver. Or a very real possibility of buying a $4,000,000 single family home in the future for $3,600 of todays money.
This is an exciting possibility, but a very real possibility since this is the first time in history that every single countries finance system is on a FIAT Currency system. At one time the U.S. was the only country truly on a gold standard that forced every other country to trade using our Dollar Bills. In 1971 that connection was separated and has caused the Dollar to fall in purchasing power compared to gold.
Learn about currency markets and get excited!
Quad City Real Estate Investors Association
http://www.qcreia.weebly.com
Here is the proof of getting a loan to buy a deal with a 585 Credit Score.
http://www.deansmedia.com/play.php?vid=165
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