Is Seasonality Out the Door in Long Island?

If you think this weather is crazy, what about what’s happening in real estate? We’re not sure whether to call it “home warming” or “real estate change,” but it’s something to believe in.  Median sale prices for single family homes in Nassau County increased for the second month in a row in January, but looking at the strange path prices took last year, it’s pretty much impossible to describe the market as having much at all to do with the seasons we learned about in grade school. Redfin’s Nassau County agent Caitlin Mooney explains that, “after the last couple of harsh winters, we’ve been treated to some very mild weather the last few months, so the buyers just never retreated to their holiday breaks or winter hibernation.”

Redfin’s tour data supports Caitlin’s notion, showing that Redfin’s buyers did exhibit the typical summer rush on homes in July, but they just never took going into the fall or winter months as we would have expected them to in a normal year. If tour numbers and demand stay where they are or even increase at all, we can expect prices to continue on their upward climb into what are commonly referred to as the spring months.

For a complete picture of the local market’s most recent stats and trends, download the Redfin Market Report here: Redfin-New-York-Real-Estate-Market-Report-January-2012. Want to know how the Long Island real estate market is doing compared with the rest of the country? Take a look at the Redfin Heat Index:

The Redfin Heat Index (Beta) uses listings, sales, and price changes to determine the relative “heat” of a given real estate market. We set a baseline Heat Index of 75.0 at 6.0 months of supply and +5 % price change year-over-year.
Every percentage point increase in prices above the 5% baseline will increase the heat index by two points, every percentage point decrease in prices below the 5% baseline will decrease the heat index by two points.
Every one month of supply increase above the 6.0 baseline will decrease the heat index by seven points, every one month of supply decrease below the 6.0 baseline will increase the heat index by seven points.
Here’s the formula:

• MOS = Months of Supply: End of Month Inventory / Closed Sales in the Month
• $YOY = Year-over-year change in the median price per square foot.
• Heat Index = ((MOS – 6.0) * 7) + (($YOY – 5%) * 2) + 75

Case-Shiller: Another Winter for Home Prices

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – November data is released in January).

Here are the basic Case-Shiller stats for the New York City commuter area* as of November:

Nineteen of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between October and November (the same as between September and October): Only Phoenix saw an increase, for the second month in a row. This month Chicago bumped Atlanta out of the bottom spot, falling 3.4% in a single month.

Here’s a look at the latest local tiered data, back through 2000:

And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:

New York’s low and high tier both fell in November, but the middle tier inched up a bit. Month to month, the low tier was down 0.5%, the middle tier rose 0.2%, and the high tier decreased 1.5%.

In this next chart, I’ve visualized the month to month trends of all twenty Case-Shiller-tracked cities. Green and above the horizontal axis if they were increasing in the month charted, red and below the axis if they were decreasing. I’ve excluded 2000 through 2004 since they looked largely the same as 2005 (mostly green).

Just five months ago, all twenty cities saw month to month gains. Now just one is not the red.

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Redfin Agents’ Negotiation Skills Get Equity for Buyers

Guest post by Dawn Sullivan, owner of All Shores Mortgage in Long Island and Redfin Partner Lender.

Aside from confirming that I’ve locked them in at a record-low interest rate, the best news I can share with a home buyer is that their appraisal came in high, meaning the home is worth more than they are about to pay for it. Last year, my team and I found ourselves delighting Redfin clients with this news more often than not, so we decided to take a closer look into it.

We reviewed all the transactions we worked on in 2011 to find that on average, Redfin home buyers had an appraised value that exceeded their purchase price by more than $14,000. The other homes we financed last year appraised for an average of $4,722 more. A high appraisal is an ideal situation for a buyer because it means he is starting off with additional equity in the home.

If numbers could talk, what would these ones say?  They tell us that Redfin agents are really good negotiators.  I think this is directly related to Redfin’s unique approach which compensates agents based on client satisfaction rather than commission. I see time and time again that a Redfin agent’s ultimate goal is to ensure that their clients get the best deal possible and are happy throughout the process. I always enjoy the opportunity to work with a Redfin client, especially when I’m able to deliver the news of a high appraisal!