Author: Josh Welch

Data Analysis

Sun City Real Estate Sales – January ’23 Update

Posted on by Josh Welch

Data source: pshomes.com – a great collection of homes, for sale and sold, by development in the Coachella Valley

Sun City is one of the largest 55+ communities in the US, located east of Palm Springs with 5,000 condos.

Here’s an update on Sun City sales – with January ’23 sales added

  • What did January ’23 sales look like? (chart 1)
    • Average sold price: $613K
      • Steady at last ~14 month average
      • Number sold: 18
      • Average days on market: 53
      • Average sold price: 3% below list price
    • So average price went back to ‘normal’ even with sales slowing down
  • Let’s limit (normalize) the sales data to the most numerous home size: 2 bed/2 bath condos
  • The data set gives much more stable data over time (
    • Again, with just January ’23 sales
    • Average sold price: $503K
      • Steady at last ~14 month average
      • Number sold: 8
      • Average days on market: 50
  • Looking forward: Number of months to sell inventory
    • 2/15/23 : 5.3 months
      • (96 total condos for sale/18 condos sold in Jan ’23)
    • 1/26/22 : 4.5 months
      • (85 total condos for sale/19 condos sold in Dec ’22)
Data Analysis, Life

US Housing Market – Another Way to Look at Rising Interest Rates

Posted on by Josh Welch

Someone made the comment that home prices have gone down with the increase in mortgage interest rates: people just haven’t realized it.

How does one put numbers towards this statement?

Mortgage interest rates have increased):

  • Around 3.5% for 11 years (mid 2012-year end 2022)
  • Around 6.5% since start of 2022

FRED Chart source:

Note: Portland, Oregon Median House Value: $555K in March, 2021

Standard way to present increasing mortgage interest rates:

  • A $500K home, 30-year mortgage, 100% down (second chart)
    • at 3.5% monthly payment = $2,245
    • at 6.5% monthly payment = $3,327
  • Net: Buyer needs to find more money for monthly payment

Closer to the truth: a home buyer has talked to a banker prior to purchase and has a maximum monthly payment in hand.

How has the home purchase amount changed with a set monthly payment?

A $2,200 monthly payment, a buyer can purchase:

  • With 3.5% interest, purchases a $500K home
  • With 6.5% interest, purchases a $355K home

So this 3.0 point rise in mortgage interest rates, lowers the home value that can be purchased by 29% with all other variables around a home purchases staying fixed. This is the point the commentator made regarding lowering home values. Most people cannot simply increase their monthly payment to purchase a home.

Data Analysis

Sun City Real Estate Sales – Last Two Years

Posted on by Josh Welch

Let’s look at Sun City – one of the largest 55+ communities in the US, located east of Palm Springs with 5,000 condos.

  • NET:
    • Prices increased across 2021 by 32%
      • 1QTR21 average $439K
      • 4QTR21 average $581K
    • Then held steady across 2022 at about $600K
      • Perhaps average getting soft, Nov-Dec ’22
  • Effects from Fed raising interest rates?
    • Perhaps a slow developing change
    • Year prior to July 1, ’22 compared to July – Dec ’22
      • Condos sold/month down 50%
        • 31 homes to 22 homes
      • Average days on Market up 50%
        • 28 days to 45 days
    • Prices largely held steady until Nov/Dec ’22
  • How do sales in this community differ from the norm?
    • 55+ Community, strong HOA
    • People purchasing not dependent on a job
    • Likely based on ability to sell prior home
    • Likely to pay cash rather than mortgage
    • Historically, more sales in snowbird season (winter) than in summer
Learning

Helping Me Blog: Hay House’s Book Writing Challenge

Posted on by Josh Welch

Reid Tracy and Kelly Notaras are hosting this free 4-day challenge this week. I am hoping it will help me organize my thoughts and writings around my blog. Perhaps you will be able to attend too.

Hay House is providing support: “Our Aspiring Author’s Tool Kit”:

Learning

Twilio Segment Webinar, “Navigating a Cookieless World with Better Data” January 17, 2023

Posted on by Josh Welch

Their agenda:

  • Gain a better understanding of upcoming data trends
  • A view on the advertising landscape how best practices are shifting and why
  • What it means to harness first-party data in this new era

My thoughts: Great panel (Google, Meta, Snap and Deloitte Digital). Very candid answers. In April, 2021 Apple started making privacy changes, over 18 months later the main online platforms are still grappling with how to react. Still grappling with developing products to bring to market to help company’s with on-line marketing and advertising on their platforms. Twilio is figuring it out.

I was especially impressed with Michelle McGuire Christian, Deloitte Digital and Chris Plambeck, Snap Inc. contributions to the webinar.

Twilio Segment’s recorded webinar

Learning, Life

Expectations for 2023

Posted on by Josh Welch

Why not put out my guesses along with the Conventional Wisdom (CW) for various topics. Each topic will have a blog post with detailed information and source links.

China – Slow to recover after reopening with mass COVID infections. Recovery will take into 3rd and 4th Quarter.

  • Unlocked society after 3 years in late December ’22
    • No country opened faster and with so little planning
  • CW: Recover quickly in three months – at end of 1st quarter
    • I disagree, think recovery will take longer
    • Recovery from the trauma will take more time

US Federal Government Leadership –

  • CW: Gridlock is the usual, just moved to US House: I agree
  • Third year of presidency is usually flat economically

US Stock and Bond Markets –

  • Stocks largely unpredictable – movement based on crowd psychology
    • Though based on numeric market fundamentals
    • I need to explore data modeling of
      • Crowd psychology and market fundamentals
  • Best guess: -5% to -10% return for year
  • CW: Stock Market is largely unpredictable

US Federal Bank – will move interest rates up more, US will have a slight recession around 3rd quarter

  • CW: Rich will have a recession, not affect working and middle class as much
    • Wall Street (stocks and bonds) more affected
  • Myself: Inflation is taking a bite out of everyone
  • Recession Shape
    • I need to explore interactions between Baby Boomers, Gen X & Z
      • Affecting recession and US real estate values
  • Shortage of Workers
    • Why? What is the effect of the mass inflow of immigrants?
      • I need to explore US census & employment data
        • Think answer is in Baby Boomers retiring with Gen X & Z getting older

Technology –

  • ChatGPT – CW: The Next Big Thing? Or will we wait?
    • How will it be used? Unknown, TBD
    • I need to learn
  • Cookie-less online advertising and marketing still being developed
    • CW: Which company/app will dominate? Google, Meta et al addressing
    • I need to learn
  • US 5G Service – CW: Did not turn out to be The Next Big Thing
    • More stable and widely available 4G level speeds
    • My observation: More short video streaming instead of text on news sites
  • US Federal Gov. funding for chip manufacturers
    • CW: National security issue: shoring up existing industry
  • What about all the satellites launched last year?
    • My curiosity – haven’t heard recent update
  • What about iLot mentioned in press 2017-2019
    • My curiosity – haven’t heard recent update

European Union – All points are CW: Surprisingly resilient as standard of living drops

  • Jump in energy costs for all EU countries, w/Ukraine war
    • Surprisingly well received by citizens
    • Helped with fast reactions by EU governments
  • Other choice being: more steps towards war w/Russia

Interesting ‘Winners’ of the Ukraine war – All points are CW

  • India and China are purchasing the inexpensive ($60US/barrel) Russian oil exports
    • So their economies are getting a boost
    • Where EU economies are getting depressed
  • Globalization is slowing down –
    • Countries with more complete economies better positioned

That’s about it for my observations and a few predictions.

Data Analysis, Life

Comparing Furnace & AC Quotes

Posted on by Josh Welch

Here is a quick comparison of seven quotes from four companies to replace our furnace and AC systems with two different furnace and two AC systems

  • The chart is organized by the two different furnace and AC systems, then by price from lowest to highest
    • Furnace Systems
      • 1 Stage: the burner has one high setting
      • 2 Stage: the burner has a low and high setting
    • AC Systems:
      • 13 Seer: Most common around Portland, OR
      • 16 Seer: More energy efficient than 13 Seer
  • Which system and price quote would you pick?
  • We picked the $13,200 2 Stage furnace and 13 Seer AC system