CapitalismWorks_IHB
New member
I think IPOs numbers are good reflection of what has happened in SFR 3-4 bd segment this year. They do not capture the larger drops that have occurred in the low and high end segments. The broad measure also mask details that arise from a more granular approach.
For example, in the low end the Jasmine tract in QH (condos) sold for an average price/sq ft. of 393 in 2008, while coming in at 341 in 2009, for a 13% drop. This drop is also matched on a more defined scale when examing the asking prices on 2/2 in the same tract that are now below the asking prices for last phase units sold in 2004 (they are still above the asking prices for the initial phases). IPO's CS does not reflect these price changes.
Moving to another middle tier QH tract, Olivos, we find only 5 total sales in the past 2 years with a very wide dispersion in $/sq.ft. with a high of $476 and a low of $375 (both of which occurred in 2009!). Given the dispersion and low volume it is extremely difficult to make a meaningly inference on price movements. Given that housing is a highly inefficient market, the degree of noise obscures any analysis particularly with such low transaction volume.
Interest rates is a factor ignored by CS. Prevailing rates are lower than any time in history, lowering cost of carry and obscuring the price trend.
For example, in the low end the Jasmine tract in QH (condos) sold for an average price/sq ft. of 393 in 2008, while coming in at 341 in 2009, for a 13% drop. This drop is also matched on a more defined scale when examing the asking prices on 2/2 in the same tract that are now below the asking prices for last phase units sold in 2004 (they are still above the asking prices for the initial phases). IPO's CS does not reflect these price changes.
Moving to another middle tier QH tract, Olivos, we find only 5 total sales in the past 2 years with a very wide dispersion in $/sq.ft. with a high of $476 and a low of $375 (both of which occurred in 2009!). Given the dispersion and low volume it is extremely difficult to make a meaningly inference on price movements. Given that housing is a highly inefficient market, the degree of noise obscures any analysis particularly with such low transaction volume.
Interest rates is a factor ignored by CS. Prevailing rates are lower than any time in history, lowering cost of carry and obscuring the price trend.
