Joined Deirdre Bolton to talk about the U.S. high end development residential market. We talked about softness at the NYC high end and how the cooling of new development doesn’t speak for the entire high end market.
I spoke with Deirdre Bolton on “Risk & Reward” today to speak about last weekend’s excellent New York Times real estate piece by Julie Satow called “Dialing it Down.” Deirdre focused on the metric developed during my preparation of last week’s Elliman Report of Manhattan sales in 3Q2014 showing that luxury inventory has doubled over the past year.
It was great to reconnect with Deirdre Bolton after she made the move to Fox Business from her long time home at Bloomberg TV.
We talked housing, touching on NAR’s pending home sale index release as well as research from Realtytrac concerning record prices in a growing number of urban markets.
Since we have another cold snap in our midst, I thought I talk about cold weather and housing trends.
Back in early January, the US experienced what has now become a household phrase – “The Polar Vortex” and extreme weather has morphed its way into recent housing reports as plausible explanations for a slow down in some of the results.
Buyer perspective: Imagine a couple looking to buy their first home and decide they will begin looking right after the New Year. The dreaded Polar Vortex hits and it is too uncomfortable to run around looking at houses in freezing temperatures, so they postpone until the weather warms up in a month or 2.
Seller perspective: Imagine a homeowner who decides to put their home on the market and they experience searing pain from the cold by simply going to the grocery store. They can’t imagine a buyer coming to look at their home in the severe weather and don’t want their home to sit, so they postpone until the weather warms up in a month or 2.
In both scenarios, I would venture to guess that no one would say:
WOW, this weather is severe. I’ve rethought my (buying or selling) decision and will cancel the idea for a few years because the weather is too cold right now.
WOW, this weather is severe. Staying warm in my home right now made me realize that I rushed to make my decision and will no longer (buy or sell) for a long time.
Consumers can better relate to the weather than macro economic theory so throw it into the title of a news article:
NBC News: Spring Thaw May Not Heat up This Housing Market
Bloomberg News: Cooling U.S. Home Sales Only Partly Due to Weather: Economy
Fox Business: Housing Freeze: It’s Not Just The Weather
If we isolate the housing market to new construction (which represent about 15% of sales historically) then it gets a lot more plausible – ie permits, starts etc. can be more affected by the weather on a pragmatic basis.
But that has little or no impact to the vast majority of housing consumers.
Here’s one way to visualize the potential impact of weather to retail sales activity (translation: slow down, spring back) in Business Insider.
Context, people, context.