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Brian Opsal

Vice President, Marketing

Phone: 530.550.2546

As Housing’s P/E Ratio Indicates, The Investors Did Their Job.

Can traditional home buyers take it from here?


TRUCKEE, Calif. – March 31, 2014 – Clear Capital (, 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 March 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.


  • March non-seasonally adjusted national home prices remained mostly flat over the winter, while distressed saturation over the month remained stable at 21.8% (Chart 1). Concerns over short-term declines remain in the Midwest with nearly non-existent growth over the quarter. The last time the Midwest fell into negative territory was June 2012. Five metro markets show quarterly declines, a reminder that local economies and weather matter (Charts 2 and 3).
  • Low price tier home sales (homes selling for $95,000 and less) have fueled the recovery over the last two years. This deeply discounted sector attracted enough buyers to drive prices up 31.8% from the bottom of the market in 2011. Over the last quarter, however, low tier home price gains slowed to just 1.2%—a big difference from 3.7% a year ago. Stabilization, with rates of growth not seen since November 2011, could motivate first time and move-up home buyers to re-engage.
  • Following the peak of the market in 2006, home prices were outpaced by the owners’ equivalent of rent for 21 out of 23 quarters through 2011 (Graph 1). This environment created attractive investment returns and helped drive investor demand at the metro and sub-metro levels at a pace exceeding historical norms. While the recovery took hold, home price gains outpaced growth in the owners’ equivalent of rent in most of 2012 and 2013. As prices continue to moderate in 2014 toward more historical rates of growth, investors will need to dive down into granular data and analysis to find markets where attractive home prices and rental rates still offer competitive investments.
  • Contact Brian Opsal for your March 2014 file of the Top 30 MSAs or access our data on the Bloomberg Professional service by typing CLCA <GO>.


“Our data through the end of March reveals prices remained steady through the final weeks of winter, a sigh of relief to all market participants,” said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. “Yet, national quarterly gains of just 0.7% mean there’s certainly still risk for short-term price declines in some markets. But over the year, we see Phase Three of the recovery unfolding, which we define as moderation across all price tiers.


Analyzing rental rates and home price trends at the national level suggest the current investor pool may start to wane as the rate of home price growth outpaces the rate of owners’ equivalent of rent. Don’t expect investors to exit all at once. Good deals at the micro market level will persist well into 2014.


The key to overall market progress and stability in 2014 will lie in the transition from investor to traditional home buyer demand. While each segment will continue to be important, healthy markets have shown higher rates of traditional home buyer demand and less investor-driven demand. Should prices remain stable, home buyer confidence will build, supporting a balanced transition.”



Housing’s Price to Earnings Ratio (P/E Ratio) supports waning investor demand. As home prices rise faster than rental rates, the P/E Ratio climbs, potentially reducing investor returns within the single family rental asset class.

Graph 1: Clear Capital Price to Earnings Ratio. Source: Clear Capital®



 National and Regional Markets
Market Qtr/Qtr Yr/Yr Distressed Saturation
National 0.7% 9.8% 21.8%
West 1.8% 16.8% 19.7%
Northeast 0.7% 6.5% 14.6%
South 0.5% 7.4% 25.9%
Midwest 0.1% 9.4% 28.1%


Chart 1: National and Regional Markets – March 2014. Source: Clear Capital



 Highest Performing Major Metro Market
Qtr/Qtr Rank Metropolitan Statistical Area Qtr/Qtr % +/- Yr/Yr Distressed  Saturation
1 Riverside, CA – San Bernardino, CA – Ontario, CA 2.5% 22.2% 23.0%
2 Fresno, CA 2.1% 17.9% 26.9%
3 San Diego, CA – Carlsbad, CA – San Marcos, CA 2.1% 19.7% 18.5%
4 Sacramento, CA – Arden, CA – Roseville, CA 2.1% 22.9% 22.3%
5 Los Angeles, CA – Long Beach, CA – Santa Ana, CA 2.1% 20.4% 16.6%
6 Oxnard, CA – Thousand Oaks, CA – Ventura, CA 2.1% 18.8% 17.0%
7 Miami, FL – Ft. Lauderdale, FL – Miami Beach, FL 1.9% 17.6% 30.3%
8 Louisville, KY 1.8% 12.7% 18.1%
9 Las Vegas, NV – Paradise, NV 1.8% 19.5% 30.1%
10 Bakersfield, CA 1.8% 17.3% 26.0%
11 Providence, RI – New Bedford, MA – Fall River, MA 1.8% 14.2% 19.4%
12 Phoenix, AZ – Mesa, AZ – Scottsdale, AZ 1.8% 17.0% 18.1%
13 Detroit, MI – Warren, MI – Livonia, MI 1.7% 23.4% 31.7%
14 Boston, MA – Cambridge, MA – Quincy, MA 1.7% 12.7% 12.8%
15 Seattle, WA – Tacoma, WA – Bellevue, WA 1.5% 14.2% 24.2%


Chart 2: Highest Performing Major Metro Markets – March 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 -2.6% -2.0% 19.9%
2 Dayton, OH -2.4% 2.4% 29.8%
3 Jacksonville, FL -0.2% 6.8% 45.3%
4 Milwaukee, WI – Waukesha, WI – West Allis, WI -0.1% 4.1% 27.2%
5 Baltimore, MD – Towson, MD -0.1% 4.8% 24.4%
6 Cleveland, OH – Elyria, OH – Mentor, OH 0.0% 7.8% 25.5%
7 Charlotte, NC – Gastonia, NC – Concord, NC 0.2% 9.0% 17.2%
8 Memphis, TN 0.2% 6.7% 34.3%
9 Chicago, IL – Naperville, IL – Joliet, IL 0.2% 13.3% 39.5%
10 Richmond, VA 0.3% 6.1% 23.7%
11 St. Louis, MO 0.4% 9.1% 27.0%
12 Tampa, FL – St. Petersburg, FL – Clearwater, FL 0.4% 10.1% 34.5%
13 Virginia Beach, VA – Norfolk, VA – Newport News, VA 0.4% 4.2% 25.5%
14 Rochester, NY 0.4% 3.9% 8.8%
15 Birmingham, AL – Hoover, AL 0.5% 3.7% 20.1%


Chart 3: Lowest Performing Major Metro Markets – March 2014. 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 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 ( 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.


Brian Opsal

Vice President, Marketing

Phone: 530.550.2546