Tag: statistics

With the pandemic forcing people to stay at home, many are looking to improve the smart technology features of their home. A quarter of those surveyed have more interest in smart tech as a result of spending more time at home, up to 37% for those in the 18-34 age range. Even people who already own smart home technology, which encompasses 57% of all people in the US, are looking for more, with 41% having purchased more since the pandemic began.

The most commonly owned smart tech includes smart TVs, speakers, doorbells, robot vacuums, and thermostats. But if people had to choose just one smart feature to add to their home, over a fifth said it would be a high-tech home security system. This was also one of the most desirable features of a new home, along with a smart doorbell with a camera. Looking to the future, however, 35% want smart home features that would enable them to be more green and energy efficient, particularly focused on solar energy. Practicality isn’t the only concern, though, as entertainment and relaxation based smart tech features are also gaining in popularity as it has become more difficult to entertain oneself outside the home.

Photo by ThisisEngineering RAEng on Unsplash

More: https://news.move.com/2020-12-17-Realtor-com-R-Survey-More-than-a-Third-of-Young-Americans-are-More-Interested-in-Smart-Home-Technology-Due-to-the-Pandemic

GDP, or Gross Domestic Product, is defined as the total final value of all goods and services produced, and is one of the most frequently used indicators of economic health. But how much does it actually tell you, and how can that information be used? For the most part, GDP is simply a broad overview of a state’s economic health, and tells little about how the residents of that state are doing. There are, however, strong correlations that enable the direction of change in GDP to be a good indicator of the direction of change in fiscal wellbeing of the people, even if the exact value of GDP is largely irrelevant for that purpose.

This is because the interplay of GDP, employment, and home sales volume tends to form a continuous economic cycle. If more new homes are sold, this directly increases GDP, which is generally followed by an increase in employment with a delay of usually about a year. In turn, increased employment means more people are able to afford to buy homes, thereby increasing home sales volume and continuing the cycle. Any one factor increasing can trigger the cycle to begin, and it also works in the negative, so a decrease in any triggers a decrease in the next. Of course, as with any economic cycle, certain events can cause it to derail — for example, unusually high sales prices can result in inflated GDP numbers without increased sales volume. It is also important to note that GDP includes only new products, which means that reselling homes doesn’t increase GDP, and with construction being as slow as it is, a great many home sales are resales.

Despite their limitations, GDP growth and decline numbers are still useful for big picture assessments. But if you really want a good idea of the local economy in a region, the most important statistic to look at is employment. Other statistics that directly affect peoples’ lives are also valuable, such as home sales volume as well as home prices.

Photo by Matthew Lancaster on Unsplash

More: https://journal.firsttuesday.us/the-interplay-between-home-sales-volume-gdp-and-employment/34485/

As of September, California had lost about 1.5 million jobs in the prior 12 months, resulting in many people falling behind in house payments. This includes both renters and homeowners with a mortgage, who are both reporting various degrees of certainty about their ability to pay. Of those renters who are still paying rent despite the moratorium on evictions, about 48% don’t have high confidence in their ability to pay next month. Less than 70% of homeowners think they can pay their mortgage.

All this uncertainty is leading to a very static market. Buyers simply don’t have the income to purchase a home. Sellers are raising prices to recoup some of their losses, or just not listing right now. A stimulus package isn’t going to be enough to solve this problem — the people need more confidence before they will want to buy or sell. This means we need job recovery. While the unemployment rate may make it appear as though the situation isn’t dire, that’s largely because of the manner in which unemployment is calculated. Those who aren’t actively looking — as many are not currently during the pandemic — aren’t included in unemployment numbers, as they have dropped out of the labor force (See this article for more information about the labor force participation rate and its connection to unemployment: https://www.beachchatter.com/2020/11/23/understanding-labor-force-participation/). We’re not likely to see a recovery until 2023 at the earliest at the current rate.

Photo by Sandy Millar on Unsplash

More: https://journal.firsttuesday.us/over-one-half-of-renters-one-third-of-homeowners-arent-sure-they-can-pay-next-months-housing-payment/74941/

Labor force participation (LFP) and unemployment may seem like direct inverses of one another, but that isn’t the case. LFP measures the percent of employed people plus the percent of unemployed people actively seeking employment. Those who are unable to work or have chosen to leave the workforce are not included in LFP, and in fact such people aren’t even included in the unemployment count. This includes many people affected by the COVID-19 pandemic who either can’t work from home or have decided that continued employment isn’t worth the risk of infection. This has actually decreased the unemployment rate, but not because people are getting their jobs back, rather because a smaller percent of people are under consideration for employment. The California LFP has been roughly 2% below the US total for nearly two decades, with a few exceptional years. They most certainly are not static, though, as both have been trending downward, with the first half of 2020 demonstrating a steep decline before partially recovering.

Photo by Kemal Kozbaev on Unsplash

More: https://journal.firsttuesday.us/the-labor-force-participation-rate-continues-to-shrink-with-poor-implications-for-real-estate/74804/

The National Association of Home Builders (NAHB) now has data for Q2 of the year for its Housing Opportunity Index, which measures affordability of homes compared to median income. The US adjusted median income is currently $72,900. With these earnings, 59.6% of home sales were affordable in Q2 of 2020. This is down from 61.3% in Q1. This downward trend is largely expected, though, since the overall direction of movement has been down since NAHB introduced the Housing Opportunity Index in 2012, with occasional ups and downs. At its inception, the value was 78.8%.

What causes affordability to go down? The index looks at three factors: mortgage interest rates, median incomes, and home prices. Since interest rates are at historic lows right now, they’re not the culprit for falling affordability. Home prices are still rising more quickly than the median income, despite the rate of increase for home prices dropping in the last several years. Not to mention much of the recent boost to median income is not actually a result of increased wages, but rather job losses — since unemployed persons are not included in the median income figure, low-wage earners losing their jobs due to the recession and COVID-19 has artificially inflated the median income.

Photo by Diane Helentjaris on Unsplash

More: https://journal.firsttuesday.us/homebuilders-housing-opportunity-index-declines/73810/