What Parcl Traders Need to Know
- Tradable Parcl v3 markets finished March up 2.4% in aggregate (ppsft).
- Several residential real estate markets experienced notable price increases MoM; Chicago (+6.9%), Atlanta (+6.9%), and Boston (+4.8%) stood out. The USA price feed grew 3.1% MoM.
- On the other hand, Miami Beach (-3.1%), Brooklyn County (-1.2%), and Portland (-0.6%) were laggards.
- Chicago claims the best MoM performance (+6.9%) with Atlanta (+6.9%), followed by Boston (+4.8%).
- Daily funding rates across Parcl markets are positive with a long bias amongst traders; notably, markets such as Miami Beach, San Francisco, and New York maintain the highest OI.
Parcl will have many more global locations coming soon! Stay tuned.
The State of Real-Time Real Estate Prices
Real estate market data for March shows variegated movements across several markets, with the overarching theme being an upswing in a majority of the cities.
The average movement MoM across all tracked markets stands at 2.3%. The US price index remains on an ascendant path, marked by a 3.8% YTD and an even more robust growth of 9.4% YoY.
Some residential real estate markets experienced meaningful price increases MoM. Notable declines were observed in markets such as Miami Beach, which saw -3.1% MoM, Brooklyn County -1.2% MoM, and New York falling -0.1%. Conversely, several markets exhibited strong positive growth; Both Chicago and Atlanta led with a remarkable +6.9% MoM increase, Boston followed with a +4.8% rise, and Los Angeles also posted a significant gain of +3.3%.
What Factors Are Driving Markets Generally?
In March, the real estate sector demonstrated robustness, with a notable uptick in the Housing Market Index and sustained home sales growth. This is attributed to growing confidence in the housing market's resilience, combined with strong job growth.
A few indicators to keep an eye on:
- Existing home sales in early 2024 saw a 9.5% increase due to sustained demand while pending home sales in February and March hinted at market stabilization.
- The 30-year mortgage rates observed a fluctuating yet subtly declining trend. Starting the month at 6.88%, rates dipped to 6.74% in mid-March before slightly rising to 6.87% and then settling at 6.79% towards the month's end, resulting in an average rate of approximately 6.82% for March 2024.
The 15-year mortgage rates averaged 6.18%, experiencing minor fluctuations throughout the month, with a notable decrease to 6.11% by the end. This was a slight rise compared to February's average of 6.10%.
Chart of the Week
The index that tracks publicly traded companies involved in home construction is up over 12% YTD.
As Q1 comes to an end, investors might want to consider:
- Historically, the March to August period marks the busy home-selling season, with prices typically appreciating in response to heightened demand. How should investors adjust their expectations for market performance and asset valuation in the coming quarters, given a boom in construction?
- What are the implications of new multi-family supply outpacing demand on rental yields?
What are Parcl traders doing?
Market sentiment among Parcl traders is balanced, though average funding rates are tilting fairly bullish (over 25% annualized). Notably, the highest positive sentiment is seen in Las Vegas, with a +0.1653% (58.4% annualized) funding rate. On the flip side, New York presents a negative sentiment and negative funding rate at 50.5% and -0.0362% (-10.95% annualized), respectively.
The total open interest across all Parcl markets is ~$320M, with total trader unrealized PnL standing at ~$-140K.
Disclaimer: This article has been written purely for educational purposes. This article is not intended to be investment advice of any kind.
