Seasonal Slowdown - Clear Capital - HDI™ Market Report
HDI Market Report & Forecast

Seasonal Slowdown: Six More Weeks of Winter or an Early Spring?

By February 8, 2016 No Comments

February’s Clear Capital HDI Market Report releases recent and granular data through January 2016, providing insights into market trends and other leading indices for the real estate market at the national and local levels.​

The cold wintry real estate season has arrived, and the nation’s markets are responding with markedly slower quarterly growth rates.

  • Dallas, one of the nation’s top performing MSAs of the last 6 months, appears to be one of the hardest hit MSAs this winter. Growth has fallen from an autumn peak of 2.0% quarter-over-quarter growth in October 2015 to a meager 0.2% in January 2016 (see Graph 1). While the winter slowdown isn’t necessarily a surprise, a drop in growth of this caliber could indicate trouble in the market as home price appreciation is essentially null.
  • Other top MSAs are feeling the chill, as well – San Jose has also dropped from its high of 2.5% quarterly growth in October 2015 to a low of 1.0% this January. While San Francisco and Atlanta have both experienced similar drops in growth so far over the fall and winter period, Las Vegas has actually seen a slight uptick in growth in the last month, with QoQ growth increasing from 0.9% to 1.1% (see Graph 1).
  • Conversely, Providence, RI has exploded in quarterly growth since December 2015, surging from 0.5% to 2.8% QoQ growth in the last month. Our December report also noticed growth in Providence, marking a shift from Providence’s performance as the #1 Lowest Performing MSA in October. Additionally, Houston appears to have made an seasonally uncharacteristic jump in QoQ over the last month, increasing by an impressive 0.5% from 1.0% to 1.5% quarterly growth. These two markets appear to be unaffected by the typical Winter slowdown as price growth is on the rise.
  • Regionally, the West continues to outpace the rest of the nation during the winter real estate season, with QoQ growth holding steady at 1.0% with no change in QoQ growth in the last month. The South is currently pacing at 0.6% QoQ growth, down only 0.1% since last month. The Northeast and Midwest are showing 0.5% QoQ growth in the last quarter, each down 0.1% and 0.2% respectively since December 2015. Nationally, quarterly growth is holding steady at 0.7%, with no change from December 2015.

“The typical winter real estate slowdown appears to be in full effect, as growth is down across most of the nation’s markets. While we would typically expect a market downtrend this time of the year due to an overall lower level of activity in the real estate market, there is added volatility in the market due to the implementation of TRID, the broader economic slowdown, and the string of bad runs in the equity markets. These factors appear to be compounding the traditional wintry effect by adding to the overall uncertainty of the housing market, likely scaring off potential buyers, and driving overall demand downward. What remains to be seen, however, is just how long this icy winter weather will last. If the lack of confidence and affordability in the housing market continues to crowd out some key segments of the housing market, namely first-time homebuyers, it could be a long winter for the nation’s real estate market. But, as the nation’s consumers begin to adjust to the new norm of a higher cost to entry, some individual markets may be able to stave off the cold winter and see spring come early,” states Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.


Graph 1. Quarter-over-Quarter Growth through January 2016. Source: Clear Capital®

 National and Regional Markets
Market Qtr/Qtr% +/- Yr/Yr Distressed
National 0.7% 5.0% 14.8%
West 1.0% 7.4% 10.4%
Northeast 0.5% 2.2% 13.1%
South 0.6% 5.3% 18.1%
Midwest 0.5% 4.4% 16.8%

Chart 1. National and Regional Markets through January 2016. Source: Clear Capital®

 Highest Performing Major Metro Markets
Rank Metropolitan Statistical Area Qtr/Qtr% +/- Yr/Yr Distressed
1 Providence, RI — New Bedford, MA — Fall River, MA 2.8% 5.1% 13.5%
2 Houston, TX — Baytown, TX — Sugar Land, TX 1.5% 10.8% 3.7%
3 Portland, OR — Vancouver, WA — Beaverton, OR 1.5% 9.7% 9.8%
4 Seattle, WA — Tacoma, WA — Bellevue, WA 1.4% 10.6% 10.3%
5 Denver, CO — Aurora, CO 1.4% 11.2% 6.1%
6 Detroit, MI — Warren, MI — Livonia, MI 1.4% 10.7% 16.8%
7 Phoenix, AZ — Mesa, AZ — Scottsdale, AZ 1.3% 8.2% 11.1%
8 Tampa, FL — St. Petersburg, FL — Clearwater, FL 1.2% 10.3% 25.9%
9 Sacramento, CA — Arden, CA — Roseville, CA 1.2% 8.2% 11.5%
10 Miami, FL — Ft. Lauderdale, FL — Miami Beach, FL 1.1% 10.1% 23.6%
11 Nashville, TN — Davidson, TN — Murfreesboro, TN 1.1% 7.9% 9.5%
12 Jacksonville, FL 1.1% 8.0% 27.8%
13 Orlando, FL 1.1% 8.9% 25.8%
14 Las Vegas, NV — Paradise, NV 1.1% 9.0% 18.1%
15 Boston, MA — Cambridge, MA — Quincy, MA 1.0% 4.4% 8.3%

Chart 2. Highest Performing Major Metro Markets through January 2016. Source: Clear Capital®

 Lowest Performing Major Metro Markets
Rank Metropolitan Statistical Area Qtr/Qtr% +/- Yr/Yr Distressed
1 Birmingham, AL — Hoover, AL -0.6% 1.1% 15.4%
2 Memphis, TN -0.4% -0.8% 27.0%
3 Rochester, NY -0.1% 0.4% 11.9%
4 Virginia Beach, VA — Norfolk, VA — Newport News, VA 0.0% 2.2% 18.8%
5 Dallas, TX — Fort Worth, TX — Arlington, TX 0.2% 8.5% 3.3%
6 Pittsburgh, PA 0.2% 4.9% 10.0%
7 New Orleans, LA — Metairie, LA — Kenner, LA 0.3% 4.8% 18.1%
8 Milwaukee, WI — Waukesha, WI — West Allis, WI 0.3% 3.7% 17.1%
9 Philadelphia, PA — Camden, NJ — Wilmington, DE 0.3% 2.5% 17.1%
10 Richmond, VA 0.3% 4.0% 15.3%
11 Honolulu, HI 0.4% 5.6% 7.5%
12 Tucson, AZ 0.4% 4.1% 16.2%
13 Fresno, CA 0.4% 5.6% 14.3%
14 Cincinnati, OH — Middletown, OH 0.4% 4.0% 19.0%
15 Baltimore, MD — Towson, MD 0.4% 1.2% 25.0%

Chart 3. Lowest Performing Major Metro Markets through January 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.
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