The spring season’s residential real estate rush is approaching fast. However, national home price growth remains chilly, but a warmer spring demand will require informed, fast-acting and well-positioned buyers.
- Median marketing time – measured by days on market (DOM) – has been steadily decreasing nationwide since the trough of the market five years ago. The national median DOM is hovering around the 6 week mark at 43 days for performing properties, a decrease of roughly half from the peak of 85 days in January 2012. Today, three markets have been consistently selling fair market homes in under two weeks all winter – Raleigh, Lincoln, and Denver – nearly a month faster than the national rate. There are another five major markets – Portland, San Francisco, Fresno, San Jose, and Seattle – where homes are consistently selling in less than three weeks. These markets are located in the West, where price growth has continued to outpace the rest of the nation for several years and affordability remains a top concern.
- National first quarter price growth is stable at 0.9%, where it has hovered since last November. Quarterly growth is relatively homogeneous with all regions reporting quarterly growth between 0.8% and 1.0%. The West is still edging out the rest of the nation in QoQ growth.
- San Antonio is now the nation’s fastest growing major metropolitan market. Prices are increasing at the rate of 1.8% per quarter – twice as fast as the national average. Jacksonville is close behind at 1.7% QoQ growth, jumping up a half percentage point from 1.2% since just last month. Nashville, Fresno, and Portland round out the top 5 fastest growing markets at the 1.6% quarterly growth mark.
- San Jose, on the opposite end of the spectrum, continues to tread water as the least performant major market in the nation with zero recorded growth over the last quarter. Home price growth in the east-coast market of Baltimore has rapidly decreased from 1.0% to 0.2% in just the last month – the nation’s largest single-month change.
“Along with an increase in temperatures, the spring season also brings out the buyers and an increase in demand to the housing market, which most often translates to faster price growth and a decrease in marketing times,” states Alex Villacorta, Ph.D., Vice President of Research and Analytics at Clear Capital. ”But what’s great news for homeowners – particularly those looking to get out of negative equity or sell outright – is unfortunately bad news for prospective buyers. This springtime uptick in demand is likely to put buyers in a major time pinch in areas where marketing time is already lightning fast. This situation coupled with the already precarious affordability situation for buyers can lead to a self-fulfilling prophecy of sorts for the market as a whole, one where buyers rush to purchase homes at or above asking price in fear of waiting too long and losing out – pushing prices up and pulling marketing times even lower. Buyers will need to remain vigilant this spring and constantly keep their eyes peeled for new supply entering the market, and most importantly be wary of rushing to purchase at sky-high prices. “
Graph 1. America’s Highest Demand Markets: Median Days on Market Since 2010 – Fair Market Properties. Data through February 2017. Source: Clear Capital®
Graph 2. Housing Market Shelf-Life: Current Median Days on Market in Top Markets. Data through February 2017. Source: Clear Capital®
Graph 3. Top 3 Performing Markets: Current Median Days on Market versus Quarterly and Yearly Appreciation. Data through February 2017. Source: Clear Capital®
|National and Regional Markets|
Chart 1. National and Regional distressed saturation and changes in home prices from last quarter and last year. Data through February 2017. Source: Clear Capital®
|Highest Performing Major Metro Markets|
|Rank||Metropolitan Statistical Area||Qtr/Qtr% +/-||Yr/Yr||Distressed
|1||San Antonio, TX||1.8%||12.2%||1.7%|
|3||Nashville, TN — Davidson, TN — Murfreesboro, TN||1.6%||10.5%||7.6%|
|5||Portland, OR — Vancouver, WA — Beaverton, OR||1.6%||11.3%||6.9%|
|7||Charlotte, NC — Gastonia, NC — Concord, NC||1.5%||7.6%||8.2%|
|8||Seattle, WA — Tacoma, WA — Bellevue, WA||1.5%||11.1%||8.2%|
|9||Tampa, FL — St. Petersburg, FL — Clearwater, FL||1.4%||13.1%||17.3%|
|11||Washington, DC — Arlington, VA — Alexandria, VA||1.3%||6.2%||9.6%|
|12||Miami, FL — Ft. Lauderdale, FL — Miami Beach, FL||1.3%||10.3%||15.5%|
|13||Denver, CO — Aurora, CO||1.2%||10.1%||5.7%|
|14||Chicago, IL — Naperville, IL — Joliet, IL||1.2%||8.3%||19.5%|
Chart 2. Highest Performing Major Metro Markets through February 2017 Source: Clear Capital®
|Lowest Performing Major Metro Markets|
|1||San Jose, CA — Sunnyvale, CA — Santa Clara, CA||0.0%||2.1%||3.6%|
|2||Providence, RI — New Bedford, MA — Fall River, MA||0.1%||5.8%||13.9%|
|3||Baltimore, MD — Towson, MD||0.2%||2.9%||21.4%|
|4||Virginia Beach, VA — Norfolk, VA — Newport News, VA||0.2%||1.9%||16.9%|
|7||Oxnard, CA — Thousand Oaks, CA — Ventura, CA||0.4%||4.7%||6.9%|
|8||Hartford, CT — West Hartford, CT — East Hartford, CT||0.5%||2.0%||18.7%|
|9||Birmingham, AL — Hoover, AL||0.5%||2.8%||14.2%|
|10||Detroit, MI — Warren, MI — Livonia, MI||0.6%||7.7%||15.0%|
|11||San Francisco, CA — Oakland, CA — Fremont, CA||0.6%||5.0%||5.2%|
|13||Cleveland, OH — Elyria, OH — Mentor, OH||0.6%||6.7%||18.7%|
|15||Milwaukee, WI — Waukesha, WI — West Allis, WI||0.7%||6.9%||17.1%|
Chart 3. Lowest Performing Major Metro Markets through February 2017 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.