Monday, July 9, 2018

Nassau County NY Housing vs. Orange County CA Housing – Who Wins?

-- Intended for Students/New Analysts to Learn Analytics --

(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 Orange County, CA Median Price chart exhibits a sharp growth followed by a very noisy and volatile price pattern, with a slightly declining trend. While both trendlines are rejecting the extreme volatility, they are however confirming the downward movement. In order to buck the current trend, Orange County has to stay above the $735-$740K soft support. 

Since these are primarily 'Jumbo' markets, the rate environment will perhaps dictate terms going forward, forcing nervous buyers (fearing continued rate hikes would price them out of the market altogether) and sellers (sitting on the fence for further price escalations) into the mix. 

Since the Nassau County chart shows less volatility and more of a flat-line trend than Orange County's, Nassau is the winner, with a slight edge over Orange.  

- Sid Som, MBA, MIM
President, Homequant, Inc.

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