As national home prices continue to appreciate modestly into the fall season, Denver, CO stands out as one of the nation’s top performers, even as inventory shortages cause affordability to suffer.
- National average home prices continue to creep steadily upward, with quarterly price growth remaining unchanged since last month at 0.8%. Additionally, national annual price change remains well over 5.0% into October, even as the industry’s peak activity season moves further into the rearview.
- Regionally, the West continues to lead the nation in quarterly growth performance at 1.2% QoQ, while the South and Midwest are reporting 0.9% and 0.8% QoQ respectively. Growth in the Northeast continues to lag behind the rest of the nation, with prices increasing by a mere 0.3% over the last rolling quarter.
- The Dallas, TX area is currently the fastest appreciating market in the nation, boasting a 2.5% price increase over the last quarter – a rate that has increased by 0.3% since just last month. Other southern cities are also reaching the top of the growth charts, with Orlando and Tampa each reporting healthy price growth at 2.1% and 1.9% QoQ price increases respectively. Memphis and Miami also made our list of top performing markets, both hovering around the 1.5% quarterly growth mark.
- Farther west, Denver, CO is one of the nation’s most talked about markets – with a growing tech sector and an increasing popularity among millennials, home prices in the area have skyrocketed well over 11% since this time last year. The median price per square foot in the metro area is now well over $120, nearly double the area’s market low of around $65 in 2011. As prices increase, distressed saturation levels in the metro area have fallen to just 5.7%, compared to a national average of 13.5%. A low inventory of REO and short sale properties is a sign of a healthy mortgage industry, but also indicates an overall shortage of homes available on the market in the area, as even less desirable homes with potential condition-related issues are moving increasingly quickly off the market.
- Distressed homes in Denver tend to stay on the market for just 10 days before entering escrow, moving 4x faster than the national average of 43 days. The discrepancy is even greater for performing properties, which are currently moving 7x faster in the metro area than the national average, for which the median days on market is currently less than one week, a sharp contrast to the national average of 42 days.
“National price growth is moderate but encouraging as overall real estate activity begins to dip once again and peak season winds to a close,” states Alex Villacorta, Ph.D., Vice President of Research and Analytics at Clear Capital. “Despite the industry’s inevitable slowdown for the fall and winter seasons, some standout markets like Denver, CO continue to push forward with unprecedented levels of price growth. As demand driven by low interest rates continues to rise and inventory, especially that of distressed properties, continues to fall short, a perfect storm of market frenzy is created – leading to incredibly fast turn times for all properties on the market. Affordability should be a top concern for investors in the area – the area’s average home price is currently pushing $400,000 – and Denver’s rising home prices may have an expiration date as a potential interest rate increase looms on the year end horizon. In the meantime, Denver’s housing market continues to be a top performer.“
Graph 1. Price per square foot vs. distressed saturation rate for Denver, CO – Aurora, CO MSA. Data through September 2016. Source: Clear Capital®
Graph 2: Median days on market for Denver, CO – Aurora, CO MSA and nation. Data through September 2016. Source: Clear Capital®
| National and Regional Markets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Market | Qtr/Qtr% +/- | Yr/Yr | DistressedSaturation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| National | 0.8% | 5.1% | 13.9% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West | 1.2% | 8.0% | 9.5% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northeast | 0.3% | 1.5% | 14.6% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| South | 0.9% | 5.7% | 15.7% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Midwest | 0.8% | 4.3% | 16.4% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chart 1. National and Regional distressed saturation and changes in home prices from last quarter and last year. Data through September 2016. Source: Clear Capital®
| Highest Performing Major Metro Markets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rank | Metropolitan Statistical Area | Qtr/Qtr% +/- | Yr/Yr | Distressed Saturation |
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| 1 | Dallas, TX — Fort Worth, TX — Arlington, TX | 2.5% | 12.1% | 2.4% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2 | Orlando, FL | 2.1% | 11.6% | 16.4% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3 | Tampa, FL — St. Petersburg, FL — Clearwater, FL | 1.9% | 14.2% | 17.7% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4 | Portland, OR — Vancouver, WA — Beaverton, OR | 1.7% | 10.5% | 6.5% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5 | Las Vegas, NV — Paradise, NV | 1.6% | 9.9% | 15.1% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6 | Detroit, MI — Warren, MI — Livonia, MI | 1.6% | 8.8% | 13.5% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7 | Cleveland, OH — Elyria, OH — Mentor, OH | 1.6% | 9.4% | 16.1% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8 | Seattle, WA — Tacoma, WA — Bellevue, WA | 1.6% | 12.0% | 6.6% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9 | Sacramento, CA — Arden, CA — Roseville, CA | 1.6% | 10.0% | 8.1% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10 | Denver, CO — Aurora, CO | 1.6% | 11.2% | 5.1% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 11 | Memphis, TN | 1.6% | 2.1% | 18.0% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12 | Richmond, VA | 1.5% | 5.8% | 10.5% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 13 | Milwaukee, WI — Waukesha, WI — West Allis, WI | 1.5% | 4.8% | 13.8% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 14 | Miami, FL — Ft. Lauderdale, FL — Miami Beach, FL | 1.4% | 10.2% | 16.5% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 15 | Atlanta, GA — Sandy Springs, GA — Marietta, GA | 1.4% | 7.8% | 12.0% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chart 2. Highest Performing Major Metro Markets through September 2016. Source: Clear Capital®
| Lowest Performing Major Metro Markets | ||||||||||
| Rank | Metropolitan Statistical Area | Qtr/Qtr% +/- | Yr/Yr | Distressed Saturation | ||||||
| 1 | Houston, TX — Baytown, TX — Sugar Land, TX | -0.1% | 5.5% | 2.0% | ||||||
| 2 | Hartford, CT — West Hartford, CT — East Hartford, CT | 0.1% | 3.9% | 17.3% | ||||||
| 3 | Virginia Beach, VA — Norfolk, VA — Newport News, VA | 0.3% | 2.0% | 15.2% | ||||||
| 4 | Birmingham, AL — Hoover, AL | 0.3% | 0.8% | 13.0% | ||||||
| 5 | Pittsburgh, PA | 0.3% | 1.8% | 8.1% | ||||||
| 6 | New Orleans, LA — Metairie, LA — Kenner, LA | 0.5% | 6.5% | 12.9% | ||||||
| 7 | NY, NY — No. New Jersey, NJ — Long Island, NY | 0.5% | 3.4% | 12.9% | ||||||
| 8 | Baltimore, MD — Towson, MD | 0.5% | 3.3% | 20.1% | ||||||
| 9 | Washington, DC — Arlington, VA — Alexandria, VA | 0.5% | 3.2% | 12.0% | ||||||
| 10 | San Antonio, TX | 0.6% | 2.7% | 1.1% | ||||||
| 11 | San Francisco, CA — Oakland, CA — Fremont, CA | 0.6% | 6.8% | 4.9% | ||||||
| 12 | Philadelphia, PA — Camden, NJ — Wilmington, DE | 0.6% | 2.9% | 15.0% | ||||||
| 13 | Raleigh, NC — Cary, NC | 0.7% | 4.9% | 5.2% | ||||||
| 14 | Louisville, KY | 0.7% | 4.2% | 9.7% | ||||||
| 15 | Bakersfield, CA | 0.7% | 6.0% | 12.5% | ||||||
Chart 3. Lowest Performing Major Metro Markets through September 2016. Source: Clear Capital®
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.
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.
