Market Report

Clear Capital: February’s U.S. Home Prices Signal Solid Start to Spring Buying Season.

TRUCKEE, Calif. – March 5, 2013 – Clear Capital® (www.clearcapital.com), the premium provider of data and solutions for real estate asset valuation and collateral risk assessment, today released its Home Data Index™ (HDI) Market Report with data through February 2013. Using a broad array of public and proprietary data sources, the HDI Market Report publishes the most granular home data and analysis earlier than nearly any other index provider in the industry.

Report highlights include:

  • February's home prices are up 6.1% over the year.
  • Quarterly price trends at the national and regional levels show moderate improvement over the typically slow winter season.
  • 11 of 15 of the lowest performing major metro markets saw quarterly price trends in February give way to minor losses.
  • Contact Alanna Harter for your February 2013 file of the Top 30 MSAs.

“While February's yearly growth of 6.1% is encouraging, let's keep in mind this rate of growth is measured against the market's bottom, which we reported in our March 2012 Market Report,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “Consumer confidence continues to be vital to a broader housing recovery, and national quarterly home prices expanding 1.0% in the midst of winter is confirmation the recovery has legs. While 1.0% is weaker in comparison to more recent rates of quarterly growth, the positive trend continues to support homebuyer confidence and is on par with the new normal.

Recent updates on the regulatory front could also build momentum in the housing revival. The Qualified Mortgage (QM) rule gives lenders more definition on extending credit to homebuyers, who continue to be encouraged by positive economic signs. The real question now is how many of those sidelined borrowers will qualify for a loan under the new rules. All told, February's home data shows the housing recovery is on track.”

February Quarterly Trends: Prices remain mostly unchanged. Will slow and steady win the race?

National and regional home price trends remained stable and nearly flat in February, as prices continued to hold their ground over the slow winter months. National quarterly growth of 1.0% was supported by quarterly growth of 2.1%, 0.4%, 0.7%, and 0.8% in the West, Midwest, Northeast, and South, respectively.

While the West continued to lead the recovery, the Midwest, Northeast, and South's quarterly home prices remained flat over January. While these trends are modest in comparison to the aggressive rates of appreciation the market saw during the run-up, they do make an impression on consumers. By not dropping during the slow winter season, small quarterly growth could encourage consumers to re-engage in the housing market.



February Yearly Trends: Strongest national growth since August 2010.

National yearly growth of 6.1% in February marked the strongest yearly gains since August 2010 when the Homebuyer Tax Credit was boosting demand. While current home prices have improved notably over last year, gains are expected to moderate over the short term, as current yearly gains are measured against the market lows in 2012.

Each region, like the nation, experienced stronger yearly home price gains, compared to last month's trends. The West, fueled by progress in markets like Las Vegas, Phoenix and Sacramento, was the only region to post double digit gains at 13.6%.

While many of the strongest metro housing markets reside in the West, the Midwest, Northeast, and South each made noteworthy progress in February. Yearly home price gains of 4.0%, 2.6%, and 5.1%, respectively, are significant in their own right. These incremental gains may continue to fuel consumer confidence as rising home prices throughout the winter season build more trust in a sustained housing recovery.

Highest performing major metro markets continued to see gains in February.

February home price trends in the strongest metro markets remained positive, with short term quarterly gains across the board. A handful of leading recovering markets, like Atlanta, Las Vegas, Phoenix, and Miami, remained in growth mode. But their relatively low price points overall subject their short term trends to potential volatility moving forward.

The highest performing markets’ yearly growth remained robust in February. 12 out of the 15 markets achieved double digit year-over-year price gains, and all markets on the list returned yearly gains above 8.0%. Strength in longer term trends most distinguishes the highest performing markets from the lowest performing markets.

 Highest Performing Metro Markets
Qtr/Qtr
Rank
  Metropolitan Statistical Area   Qtr/Qtr
% +/-
  Yr/Yr   REO Saturation
1   Atlanta, GA – Sandy Springs, GA – Marietta, GA   3.5%   14.3%   33.8%
2   Las Vegas, NV – Paradise, NV   3.4%   18.4%   35.7%
3   Phoenix, AZ – Mesa, AZ – Scottsdale, AZ   3.3%   26.9%   17.9%
4   Sacramento, CA – Arden, CA – Roseville, CA   3.1%   15.9%   20.5%
5   Houston, TX – Baytown, TX – Sugar Land, TX   2.7%   9.1%   14.9%
6   Minneapolis, MN – St. Paul, MN – Bloomington, WI   2.5%   17.5%   15.8%
7   San Jose, CA – Sunnyvale, CA – Santa Clara, CA   2.4%   18.8%   8.7%
8   San Francisco, CA – Oakland, CA – Fremont, CA   2.3%   17.5%   15.5%
9   Riverside, CA – San Bernardino, CA – Ontario, CA   2.3%   11.9%   24.1%
10   Los Angeles, CA – Long Beach, CA – Santa Ana, CA   2.2%   11.9%   18.0%
11   Miami, FL – Ft. Lauderdale, FL – Miami Beach, FL   2.1%   14.7%   25.9%
12   San Diego, CA – Carlsbad, CA – San Marcos, CA   2.0%   11.0%   17.3%
13   Fresno, CA   1.9%   9.7%   27.3%
14   Seattle, WA – Tacoma, WA – Bellevue, WA   1.8%   18.6%   11.4%
15   Providence, RI – New Bedford, MA – Fall River, MA   1.8%   8.3%   8.6%


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Lowest performing major metro markets began to experience quarterly declines in February, though not overly concerning.

The lowest performing markets shifted into contraction territory in February, with 11 out of 15 seeing slight quarterly declines. While the number of markets experiencing price declines expanded in February, from five to 11, nine of the 11 fell less than half a percent. These minor declines are far from alarming, but something to keep an eye on.

While the lowest performing markets showed some signs of weakness, they remain stable in a year-over-year review. Just six metros on this list posted year-over-year declines, with five of them experiencing less than 2.0% in price erosion. Given these metros represent the price trend floor for markets across the country, their relative stability is encouraging. Overall, the U.S. housing market continued to hold up well in February and with spring just around the corner, we head into the more active home buying season on solid ground.

Contact Alanna Harter for your February 2013 file of the Top 30 MSAs.

 Lowest Performing Major Markets
Qtr/Qtr
Rank
  Metropolitan Statistical Area   Qtr/Qtr
% +/-
  Yr/Yr   REO Saturation
1   Columbus, OH   -1.2%   -1.2%   32.8%
2   Detroit, MI – Warren, MI – Livonia, MI   -0.9%   5.3%   46.9%
3   Charlotte, NC – Gastonia, NC – Concord, NC   -0.4%   -0.9%   25.4%
4   St. Louis, MO   -0.4%   -0.3%   35.2%
5   Raleigh, NC – Cary, NC   -0.3%   -2.1%   15.4%
6   Milwaukee, WI – Waukesha, WI – West Allis, WI   -0.3%   3.6%   27.6%
7   Cleveland, OH – Elyria, OH – Mentor, OH   -0.2%   4.6%   34.8%
8   Louisville, KY   -0.2%   -1.1%   21.1%
9   Philadelphia, PA – Camden, NJ – Wilmington, DE   -0.2%   -1.7%   7.9%
10   Dallas, TX – Fort Worth, TX – Arlington, TX   -0.2%   3.1%   23.4%
11   Memphis, TN   -0.1%   4.9%   33.4%
12   Cincinnati, OH – Middletown, OH   0.0%   2.7%   24.4%
13   Birmingham, AL – Hoover, AL   0.0%   9.6%   24.9%
14   Nashville, TN – Davidson, TN – Murfreesboro, TN   0.1%   2.3%   21.5%
15   Rochester, NY   0.2%   1.4%   1.5%


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About the Clear Capital® Home Data Index™ (HDI) Market Report

The Clear Capital HDI Market Report provides insights into market trends and other leading indices for the real estate market at the national and local levels. A critical difference in the value of the HDI Market Report is the capability of Clear Capital to provide more timely and granular reporting than other home price index providers.

The Clear Capital HDI Market Report:

  • Offers the real estate industry (investors, lenders, and servicers), government agencies, and the public insight into the most recent pricing conditions, not only at the national and metropolitan level, but within local markets as well.
  • Is built on the most recent information available from recorder/assessor offices, and then further enhanced by adding the company's proprietary streaming market data for the most comprehensive geographic coverage and local insights available.
  • Reflects nationwide coverage of sales transactions and aggregates this comprehensive dataset at ten different geographic levels, including hundreds of metropolitan statistical areas (MSAs) and sub-ZIP code boundaries.
  • Includes equally-weighted distressed bank owned sales (REOs) from around the country to give the most real world look of pricing dynamics across all sales types.
  • Allows for the most current market data by providing more frequent updates with patent pending rolling quarter technology. This ensures decisions are based on the most up-to-date information available.
Clear Capital Home Data Index Methodology
  • Generates the timeliest indices in patent pending rolling quarter intervals that compare the most recent four months to the previous three months. The rolling quarters have no fixed start date and can be used to generate indices as data flows in, significantly reducing the multi-month lag time experienced with other indices.
  • Includes both fair market and institutional (real estate owned) transactions, giving equal weight to all market transactions and identifying price tiers at a market specific level. By giving equal weight to all transactions, the HDI is truly representative of each unique market.
  • Results from an address-level cascade create an index with the most granular, statistically significant market area available.
  • Provides weighted repeat sales and price-per-square-foot index models that use multiple sale types, including single-family homes, multi-family homes, and condominiums.
About Clear Capital

Clear Capital (www.clearcapital.com) is the premium provider of data and solutions for real estate asset valuation and collateral risk assessment for large financial services companies. Our products include appraisals, broker price opinions, property condition inspections, value reconciliations, automated valuation models, quality assurance services, and home data indices. Clear Capital’s combination of progressive technology, high caliber in-house staff, and a well-trained network of more than 40,000 field experts sets a new standard for accurate, up-to-date, and well documented valuation data and assessments. The Company’s customers include the largest U.S. banks, investment firms, and other financial organizations. Clear Capital's home price data can be accessed on the Bloomberg Professional service by typing CLCA <GO>.

The information contained in this report is based on sources that are deemed to be reliable; however no representation or warranty is made as to the accuracy, completeness, or fitness for any particular purpose of any information contained herein. This report is not intended as investment advice, and should not be viewed as any guarantee of value, condition, or other attribute.

Alanna Harter
Marketing Manager

alanna.harter@clearcapital.com
Phone: 530.550.2515

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Alanna Harter
Marketing Manager

alanna.harter@clearcapital.com
Phone: 530.550.2515