When it comes to real estate, it pays to have an edge; some people have gone very far down the rabbit hole to find things that correlate to housing prices, as an indicator of what the future of the market will hold. This article will briefly discuss a handful of surprising correlations for the savvy investor (we would be intellectually dishonest if we didn’t note that correlation is not causation, but that doesn’t particularly matter if the correlations are always statistically significant).
Most Angelinos can relate to this, the cost of gas is, historically, a very good indicator of where the housing market is heading. As gas prices skyrocket, the price of houses decreases. Conversely, when gas prices plummet the price of houses increases; oddly, houses also sell faster when gas prices are low. Specifically, for every dollar that gas prices decrease, the price of houses increase by $4,000 (the time it takes to sell a home drops by 25 days) This may be as simple as noting that lower gas prices mean more cash on hand for the average person. More money on hand means more ability to purchase real estate.
That’s right, Trader Joe’s is good for property value andhealthy eating (Whole Foods has a positive impact as well, just less than Trader Joe’s). This is particularly surprising, as the value gained from these two stores dwarfs that increase in value from proximity to other grocery stores. We will not speculate on why this is the case, but we certainly enjoy the food from Trader Joe’s.
We all (hopefully) understand that climate change represents an existential threat to humanity (we don’t need to debate whether it is man-made or natural, the fact of the matter is it is happening and is a grave threat to our existence in the long term). The temperatures also have a significant impact on the value of homes. Homes in areas where the temperature is increasing slowest are seeing the largest increases in value. Living in the San Fernando Valley, this makes perfect sense – what we wouldn’t give for a low-key summer.
This one shouldn’t be a surprise. Houses on streets with trees lining the roads are worth about $7,000 more than their non-tree-having counterparts. It adds a sense of serenity to the neighborhood, and serenity is a hot commodity these days.
At the Chernov Team we understand that knowledge is power, particularly when it comes to predicting the market. At the Chernov Team we understand that whoever comes it the able most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
(5) Trees on the street
Everyone knows that stately old-growth trees add major charm to a neighborhood—and are probably an indicator of more expensive homes. But did you know just how expensive? A recent study found that houses on streets where there were trees fetched an average of $7,130 more than houses on treeless streets. Maybe it's time to consider branching out.