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" 35300 2011 1 181.66 ( 1.22)
4Q2018 Equity Point
"New Haven-Milford, CT" 35300 2011 2 177.88 ( 1.21)
"New Haven-Milford, CT" 35300 2011 3 178.89 ( 1.20)
"New Haven-Milford, CT" 35300 2011 4 179.74 ( 1.18)
"New Haven-Milford, CT" 35300 2012 1 176.96 ( 1.17)
"New Haven-Milford, CT" 35300 2012 2 174.5 ( 1.16)
"New Haven-Milford, CT" 35300 2012 3 174.76 ( 1.16)
"New Haven-Milford, CT" 35300 2012 4 175.05 ( 1.16)
"New Haven-Milford, CT" 35300 2013 1 174.95 ( 1.17)
"New Haven-Milford, CT" 35300 2013 2 174.67 ( 1.18)
"New Haven-Milford, CT" 35300 2013 3 174.36 ( 1.21)
"New Haven-Milford, CT" 35300 2013 4 173.04 ( 1.29)
"New Haven-Milford, CT" 35300 2014 1 171.51 ( 1.33)
BOTTOM
"New Haven-Milford, CT" 35300 2014 2 171.75 ( 1.28)
"New Haven-Milford, CT" 35300 2014 3 172.44 ( 1.26)
"New Haven-Milford, CT" 35300 2014 4 173.05 ( 1.26)
BEGIN 173-178 SHELF
"New Haven-Milford, CT" 35300 2015 1 175.54 ( 1.29)
"New Haven-Milford, CT" 35300 2015 2 176.04 ( 1.31)
"New Haven-Milford, CT" 35300 2015 3 175.24 ( 1.33)
"New Haven-Milford, CT" 35300 2015 4 175.95 ( 1.37)
BEGIN 2nd Year
"New Haven-Milford, CT" 35300 2016 1 175.31 ( 1.38)
"New Haven-Milford, CT" 35300 2016 2 177.17 ( 1.36)
"New Haven-Milford, CT" 35300 2016 3 178.21 ( 1.31)
"New Haven-Milford, CT" 35300 2016 4 178.24 ( 1.34)
BEGIN 3rd Year
"New Haven-Milford, CT" 35300 2017 1 177.28 ( 1.52)
"New Haven-Milford, CT" 35300 2017 2 178.03 ( 1.44)
"New Haven-Milford, CT" 35300 2017 3 178.69 ( 1.44)
"New Haven-Milford, CT" 35300 2017 4 181.21 ( 1.47)
BEGIN 4th Year and
"New Haven-Milford, CT" 35300 2018 1 181.09 ( 1.65)
end 173-178 SHELF
"New Haven-Milford, CT" 35300 2018 2 182.76 ( 1.55)
"New Haven-Milford, CT" 35300 2018 3 184.88 ( 1.64)
"New Haven-Milford, CT" 35300 2018 4 184.98 ( 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 esate 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.
