May’s Clear Capital Home Data Index (HDI) Market Report releases recent and granular data through April 2016, providing insights into housing price trends and other leading indices for the real estate market at the national and local levels.
While national growth as a whole is virtually unchanged, a sharp quarterly growth increase in the West is shaping up for yet another season of dominant performance in the region.
- Nationally, growth continues at a moderate pace of 0.6% quarter-over-quarter growth, but regionally the rates are varied. The Northeast and Midwest regional quarterly growth rates stay in the black but are sluggish at only 0.2% quarterly growth, while the South is reporting a reasonable 0.7% QoQ growth rate. These rates come with little to no change from the previously reported quarterly growth rates, all within 0.1% of the figures from last month.
- The big story is out West, where sales during the month of April have really kicked off the start of the real estate busy season; quarter-over-quarter growth has increased 0.3% from 0.9% to 1.2% since just last month. This momentum shift is setting the pattern for another strong summer growth season as the region begins to dominate regional performance once again.
- The continued dominance of the West is easy to see on our list of Highest Performing Major Metro Markets, where nine of the current top 15 call the region home. Seattle continues to lead the nation at an impressive 2.0% growth over the last quarter, an increase of 0.2% since last month, while quarterly growth in Sacramento has increased 0.3% to 1.5% QoQ. The rest of the Western top markets are all reporting at least 1.2% growth over the last quarter.
- Despite these pacesetting performances by Western metros, the condition of each individual market in the region is varied. Portland, San Jose, and Denver have all surpassed their previous peak market values from before the crash, with Seattle fast approaching its own benchmark; however, homes in Las Vegas are fetching just over half of peak market values from ten years ago. A second metric we’ve taken a peek into is the percentage point improvement in the peak distressed saturation rate for each MSA, where some cities have seen incredible performance. The current distressed property saturation rates in cities like Sacramento and San Diego have improved by 50 percentage points or more, illustrating a drastic improvement in the overall health of the market, and yet both markets have quite a way to go to recovering all market value lost during the crash.
“Real estate market headlines have repeatedly documented the strong, potentially bubble-like recovery of the West over the past couple years, and this continued trend of performance doesn’t appear to be going away just yet. However, it’s important to remember just how varied the standing of each of these Western metro’s recoveries remains. While the West as a whole has seen incredible performance since the lows of 2011, comparisons between individual markets like Denver and Las Vegas can be a sobering reminder of the devastating effects of the crash and that some markets still have a long way to go in terms of regaining lost value. Conversely, those markets that are reaching new market highs are worth keeping a close eye on since the speed at which those recoveries have occurred is clearly unsustainable in the long term,” states Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.
Graph 1. Difference between current market value and REO saturation rate from historical peak in market value (occurring in 2006) and REO saturation rate (occurring between 2009 and 2012). 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 April 2016. Source: Clear Capital®
|Highest Performing Major Metro Markets|
|Rank||Metropolitan Statistical Area||Qtr/Qtr% +/-||Yr/Yr||Distressed
|1||Seattle, WA — Tacoma, WA — Bellevue, WA||2.0%||12.2%||10.7%|
|2||Tampa, FL — St. Petersburg, FL — Clearwater, FL||1.7%||11.5%||23.5%|
|4||Sacramento, CA — Arden, CA — Roseville, CA||1.5%||9.2%||12.2%|
|5||Nashville, TN — Davidson, TN — Murfreesboro, TN||1.5%||8.9%||9.9%|
|6||Miami, FL — Ft. Lauderdale, FL — Miami Beach, FL||1.4%||10.2%||21.1%|
|7||Las Vegas, NV — Paradise, NV||1.4%||9.4%||18.6%|
|8||Denver, CO — Aurora, CO||1.4%||10.9%||6.6%|
|10||Los Angeles, CA — Long Beach, CA — Santa Ana, CA||1.3%||7.8%||8.8%|
|11||San Jose, CA — Sunnyvale, CA — Santa Clara, CA||1.2%||10.3%||3.7%|
|12||Portland, OR — Vancouver, WA — Beaverton, OR||1.2%||9.9%||10.7%|
|13||Phoenix, AZ — Mesa, AZ — Scottsdale, AZ||1.2%||8.5%||10.6%|
|14||San Diego, CA — Carlsbad, CA — San Marcos, CA||1.2%||7.5%||8.9%|
|15||Dallas, TX — Fort Worth, TX — Arlington, TX||1.2%||8.9%||2.6%|
Chart 2. Highest Performing Major Metro Markets through April 2016. Source: Clear Capital®
|Lowest Performing Major Metro Markets|
|Rank||Metropolitan Statistical Area||Qtr/Qtr% +/-||Yr/Yr||Distressed
|3||Milwaukee, WI — Waukesha, WI — West Allis, WI||-0.3%||2.6%||19.7%|
|4||Birmingham, AL — Hoover, AL||0.0%||0.2%||16.3%|
|5||Virginia Beach, VA — Norfolk, VA — Newport News, VA||0.2%||2.0%||20.4%|
|8||Detroit, MI — Warren, MI — Livonia, MI||0.3%||6.9%||18.8%|
|9||Providence, RI — New Bedford, MA — Fall River, MA||0.3%||9.7%||14.1%|
|11||Philadelphia, PA — Camden, NJ — Wilmington, DE||0.3%||2.5%||19.2%|
|12||Baltimore, MD — Towson, MD||0.3%||2.3%||28.5%|
Chart 3. Lowest Performing Major Metro Markets through April 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.
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® 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.