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Real Estate Big Data

The 20 hottest real estate markets in America [May Edition]

When looking at supply and demand, four states dominate the hottest real estate markets list – Denver holds on to the number one spot, but California makes dramatic improvements in a short period.

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California is figuratively on fire, according to realtor.com’s “Advance Read on May Trends” report, which gives a glimpse into residential real estate inventory and demand trends over the first three weeks of the month. The company says that the May data indicates that housing demand remains strong and “continues to outpace supply even with some growth in inventory.”

Nationally, the median list price rose 1.0 percent in May over April, and 7.0 percent year over year, news that homeowners will relish. The median days on market is now at 66 days, down 11 percent year over year. Listings inventory levels are improving, up 4.0 percent over April, but remaining down compared to last year.

The nation’s 20 hottest real estate markets

Jonathan Smoke, realtor.com Chief Economist, ranks the nations 20 hottest real estate markets based on a real estate hotness index, which is composed of two indicators reflective of demand and supply: the number of views per listing on realtor.com and the median age of inventory in each market.

realtor-hot-markets

Four states are sitting pretty

Denver held on to the top spot, shaving six days off their median days on market, and they remain the fastest moving inventory in the nation.

California makes up half of the list of the hottest real estate markets, with San Francisco and San Jose holding on to the second and third spots, respectively. The report notes that “California markets rank highly because of tight supply and economic-powered growth in demand.”

Smoke tells Realuoso, “What we are seeing in California is a continuation of strong momentum that started first in the strongest job growth markets of San Francisco, San Jose, and Los Angeles but is now extending into the majority of markets in the state. Strong economic growth is supporting population and household growth, but with tight existing home inventories and limited expansion so far in new construction, demand is outstripping supply. That’s why we are seeing such high levels of listing views, low days on market for inventory, and substantial price appreciation. Higher prices should encourage more would-be sellers and more new construction in the months to come.”

But hang on, Texas, Colorado, and Michigan are representin’ with each offering two cities on the list. Economic-powered gains are driving these states, but realtor.com points out that Texas and Colorado is “more of a continuing saga and shows the resilience and diversified nature of the states’ economies despite the declines in oil. Michigan’s performance is related to economic recovery and very strong affordability.”

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Real Estate Big Data

Qualified Opportunity Zones are seeing growth! What does that mean?

(REAL ESTATE BIG DATA) It’s hard to keep track of all the important factors involving the housing market but yet another is qualified opportunity zones.

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Qualified opportunity zones

Almost three years after the 2017 Tax Cuts and Jobs Act, things are looking up. In fact, in almost half of the Qualified Opportunity Zones (QOZ), home prices have increased. This reflects the growth these areas have been experiencing – pretty exciting given these zones were originally “distressed communities” in need of a boost.

To get an idea of what this really means, here’s a quick refresher of QOZs. First of all, there are 8,760 Qualified Opportunity Zones. According to the U.S. Economic Development Administration, these zones are located “ in all 50 States, the District of Columbia, and five United States territories.” Investments in these struggling areas are incentivized due to tax cuts, which helps the zones recover.

If median house prices are any indication, the plan seems to be working.

Recently, ATTOM Data Solutions released a third report on these Opportunity Zones, marking an increase in over half the median home prices between 2018 and 2019. (To compare, the national increase was 9.4%, which was beaten by QOZs in 20 states.) This is a great sign that these areas are making strides towards recovery, though it should be noted that over three quarters of homes are still below the national median price, which is roughly $250k. Awesome for buyers, but for sellers, not so much.

This growth also varied by region. For instance, QOZs in the Midwest were very likely to have median home prices under $150k, which is well under the national average. Not to mention, many areas saw their home prices decrease, rather than grow.

It’s also worth noting that although there has been growth, it might not be permanent. According to Todd Teta, who is ATTOM Data Solutions’ chief product officer: “These areas are among the most vulnerable to economic downturns. As a result, the recent upswing could change on a dime if the broader housing market flattens out or sags.”

Although things are up in the air, for now the 2017 Tax Cuts and Jobs Act is still helping to revive struggling areas. So if you’re considering moving to one of the over 8,000 Qualified Opportunity Zones, you might just be coming in at a great time.

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Real Estate Big Data

‘Boom, boom, boom,’ Kudlow declares this a ‘housing boom’ as sales fluctuate

(REAL ESTATE) Existing home sales slide for the month but surge for the year – challenges remain, but Kudlow declares this a “housing boom.”

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Existing home sales (contracts signed) dipped 1.3% in January, following the current trend of “a fluctuating pattern of monthly increases and declines,” according to the National Association of Realtors (NAR).

NAR points to sluggish sales in the Western region as dragging down the national average, while other regions saw little to no change last month.

The good news, however, is that year over year, existing home sales actually surged 9.6%. Also hopeful is the news this week that housing permits hit a 13-year high, and housing starts recently hit a 13-year high as well.

Although affordability and tight inventory levels continue to hold back the housing market, Larry Kudlow, Director of the United States National Economic Council calls this a “housing boom.”

In jest, when Fox News began to ask about existing home sales, Kudlow interrupted with the words “boom, boom, boom.”

“Whatever the question is, the answer is boom. We’re in a housing boom,” Kudlow asserted.

NAR Chief Economist, Dr. Lawrence Yun calls the outlook for 2020 home sales “promising despite the drop [in existing home sales] in January.”

In a statement, Dr. Yun said, “The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales.”

The median existing home price rose 6.8% from January 2019 to hit $266,300. Supply conditions are driving price grown, notes Dr. Yun, adding that low mortgage rates have aided with affordability.

The average days on market fell to 43 days in January (down from 49 in January 2019). Fully 42% of all homes sold in January 2020 were on the market for less than a month.

On Wednesday, Dr. Yun called the housing start and building permit data “jumpy,” which is proving to be applicable to current home sales as well.

It’s this muddy mix of monthly setbacks with wildly successful annual increases. Spring sales are set to similarly trend positively, so long as starts and permits continue to fuel what Kudlow calls a “housing boom.”

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Real Estate Big Data

Get in on alternative data – an inventive new way to market

(REAL ESTATE BIG DATA) Alternative data is a wild ride with surveillance planes, satellite images, and specially equipped helicopters, and it’s not stopping anytime soon.

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Alternative data

The road less traveled has always been a little stranger and trust me, alternative data is a little strange. Buckle-up your seatbelts, it’s going to be a wild ride.

Data has always been a hot commodity. The digital world has made it easier than ever for investors to get their hands on all kinds of data. The problem is, if one person can gain access to a data set then nearly everyone else can too. So, how are investors supposed to get an edge over their competitors and make the best decisions in their power? Please welcome, alternative data to the stage.

First of all, what the heck is alternative data? According to alternativedata.org, it refers to “data used by investors to evaluate a company or investment that is not within their traditional data sources.” Alternative data is the road less traveled. It offers investors a way to add new and unique variables to the mix.

This data can be anything from private aircraft surveillance to satellite images of parking lots. Every bit of data that investors can gather to determine their next course of action has value. It gets wild, y’all.

In the oil and gas industry, one company uses helicopters decked out with infrared beams to estimate the amount of oil in storage tanks. It may sound like something out of a silly movie, but it’s actually quite clever.

So, is alternative data just an industry fad? Probably not, but what qualifies as this kind of data will evolve over time. As certain practices become more mainstream, they will lose that “alternative” edge. Kind of like when the band you’ve been following for years gets a hit song and now, they’re everyone’s favorite band.

What’s already clear is alternative data is not pixie dust. These creative data sets can provide an interesting insight, but it shouldn’t be the sole basis of any decisions. At the end of the day, alt data points are just more variables on the table. It’s best to not get caught up in the sexiness of private jets and satellites.

One thing is for sure, we will be seeing more creative uses of alternative data in the future.

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