Market Report

Clear Capital®: Take Notice. Best Deals Now Found In Mid-Tier.

The American dream is still within reach.

TRUCKEE, Calif. – May 5, 2014 – 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 April 2014. 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.

  • Best deals move from low-tier to mid-tier. Following more than two years of recovery, the mid-tier price sector now offers home buyers the best deals, relative to peak values. After 32.3% growth from the trough in 2011, low-tier deals appear to be played out compared to mid-tier deals (homes selling between $95,000 and $310,000 nationally), with prices still 30.6% off peak values. The strong rebound in the low-tier price sector left homes, on average, just 21.5% below peak values. Top tier homes are just 18.2% off peak values.
  • Early signs show the spring buying season is off to a tepid start in April. We observe quarterly rates of growth for the nation and three of the four regions virtually unchanged over last month. Stability in this new moderating pattern, back toward historical norms of 3%-5% annually, will help restore first time and owner occupant buyers’ confidence in the market.
  • Real estate is local again. Yes, moderating price trends are converging toward one another (with just a one percentage point spread in quarterly rates of growth for the top performing 15 MSAs). But underlying drivers, like distressed sale saturation and local job markets, remain drastically different. Between Chicago’s 39.7% and San Jose’s 7.9%, the spread in distressed saturation within the top 15 performing MSAs is nearly 32 percentage points. Chicago will likely see more demand from investors looking for great deals on distressed sales (with median prices around $160,000), while higher priced markets like San Jose (with median prices around $650,000), supported by a relatively healthy local economy, may see stronger appetites from owner occupied buyers.
  • Contact Alanna Harter for your April 2014 file of the Top 30 MSAs or access our data on the Bloomberg Professional service by typing CLCA <GO>.

"Very interesting dynamics are at play as we head into spring. Though our April data suggests the spring buying season is off to a slow start, we aren't concerned about the sustainability of the recovery," said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. "To be clear, there are lots of adjustments taking place in housing markets across the country. Everything from lender regulation, consumer confidence, investors tapering purchases, local economics, and rising home prices have forced participants to continually adjust to a market that has been anything but stable.

"Generally speaking, we see price growth stabilizing throughout 2014, which should help boost the confidence and purchase activity from buyers on the fence. Looking at home price trends by tier, it's apparent the impact of investor activity has been concentrated in the low price tier segment. Conversely, the segment of the market that represents the middle 50% of all transactions is still more than 30% off peak values. This suggests that there is good price growth potential and could motivate enough buyers to sustain an overall rate of home price growth consistent with historical norms. The days of double digit price gains are behind us, and the market will continue to calibrate to the new reality of annual growth rates between 3% and 5%. A strong spring buying season might be a casualty of the major adjustments underway, but it’s no reason to ring the alarm bells quite yet."

Graph 1: National Home Prices by Tier

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 National and Regional Markets
Market   Qtr/Qtr   Yr/Yr
  Distressed Saturation
National   0.9%   9.7%   22.3%
West   1.8%   15.9%   18.3%
Northeast   0.6%   5.7%   15.3%
South   0.8%   8.2%   25.5%
Midwest   0.7%   9.0%   28.5%

Chart 1: National and Regional Markets - April 2014. Source: Clear Capital


 Highest Performing Major Metro Markets
Qtr/Qtr
Rank
  Metropolitan Statistical Area   Qtr/Qtr
% +/-
  Yr/Yr   Distressed Saturation
1   Riverside, CA – San Bernardino, CA – Ontario, CA   2.4%   21.4%   20.9%
2   Atlanta, GA – Sandy Springs, GA – Marietta, GA   2.3%   21.0%   25.6%
3   Sacramento, CA – Arden, CA – Roseville, CA   2.1%   21.3%   21.2%
4   Oxnard, CA – Thousand Oaks, CA – Ventura, CA   2.0%   18.2%   15.2%
5   Las Vegas, NV – Paradise, NV   2.0%   17.9%   28.3%
6   Los Angeles, CA – Long Beach, CA – Santa Ana, CA   2.0%   19.5%   14.9%
7   Fresno, CA   2.0%   16.9%   25.6%
8   San Francisco, CA – Oakland, CA – Fremont, CA   2.0%   21.8%   13.2%
9   Bakersfield, CA   1.9%   16.9%   24.5%
10   Miami, FL – Ft. Lauderdale, FL – Miami Beach, FL   1.9%   17.5%   29.8%
11   San Diego, CA – Carlsbad, CA – San Marcos, CA   1.9%   18.5%   16.9%
12   Boston, MA – Cambridge, MA – Quincy, MA   1.8%   12.6%   13.7%
13   Orlando, FL   1.7%   14.8%   35.2%
14   Chicago, IL – Naperville, IL – Joliet, IL   1.6%   13.5%   39.7%
15   San Jose, CA – Sunnyvale, CA – Santa Clara, CA   1.4%   17.6%   7.9%

Chart 2: Highest Performing Major Metro Markets - April 2014. Source: Clear Capital


 Lowest Performing Major Metro Markets
Qtr/Qtr
Rank
  Metropolitan Statistical Area   Qtr/Qtr
% +/-
  Yr/Yr   Distressed Saturation
1   New Orleans, LA – Metairie, LA – Kenner, LA   -1.9%   3.7%   17.8%
2   Memphis, TN   -0.8%   4.5%   33.2%
3   Milwaukee, WI – Waukesha, WI – West Allis, WI   -0.4%   2.5%   27.2%
4   Rochester, NY   -0.3%   0.9%   10.1%
5   St. Louis, MO   -0.2%   7.8%   28.4%
6   Jacksonville, FL   -0.1%   7.2%   44.8%
7   Baltimore, MD – Towson, MD   -0.1%   4.2%   25.1%
8   Pittsburgh, PA   0.0%   -1.1%   16.5%
9   Louisville, KY   0.2%   3.6%   18.3%
10   Raleigh, NC – Cary, NC   0.3%   3.4%   10.7%
11   Charlotte, NC – Gastonia, NC – Concord, NC   0.3%   7.9%   15.3%
12   Providence, RI – New Bedford, MA – Fall River, MA   0.4%   11.3%   20.2%
13   Richmond, VA   0.4%   4.6%   23.4%
14   Dayton, OH   0.4%   5.5%   27.9%
15   Birmingham, AL – Hoover, AL   0.5%   5.2%   20.6%

Chart 3: Lowest Performing Major Metro Markets - April 2014. Source: Clear Capital


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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 nearly any other home price index provider.

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 and short sales) 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 HDI 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 the mortgage finance industry. The Company's 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