Friday, June 8, 2018

Nassau County, NY Housing Market – An Alternative Analysis

(Click on the image to enlarge)

The rapid rise between May (#5) and August (#8) represents seasonality (summer buying, tapering in fall and winter) which is very common in Northeast. When the market fundamentals are strong, a sideways consolidation occurs, without a sharp decline as exhibited by the Monthly Median. Market tried to come back but couldn't hang on to the rally, losing steam quickly. A wide-angle V-shaped reversal tends to be the preview of a weak recovery, often short-lived. The fact that the 2-Month Moving Average confirmed the November fall was a prediction by itself of a weak recovery.

The normalized trend (bottom chart) is even weaker, hovering on the soft $315 support. Amazingly, both trendlines pointed to the coming weakness. The spring data needs to be very positive – with a sharp V – hopefully eclipsing the August high of $328, thus preparing the groundwork for another summer rally. Unlike the coastal CA markets, Long Island is not a cash market, rather a Jumbo market (at least, a big chunk) so the interest rate environment could be the final determinant of the next summer rally – or the absence thereof!

- Sid Som, MBA, MIM
President, Homequant, Inc.
homequant@gmail.com

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