RENO, NV--(Marketwired - August 03, 2015) -
- Trends have been manifesting across price tiers. The Clear Capital HDI measures market appreciation rates across the lowest (up to 25%), middle (26%-75%), and highest (76% and above) priced homes in an area to dissect valuation risk. The data revealed that the low-tier is closest to peak 2006 levels, with prices only 10.1% below 2006 peak levels. Conversely, the mid-tier (homes selling between $120,000 and $345,000) is the worst performing segment with current price levels 24.8% below 2006 peak levels. This vast difference in market recovery underscores the continued challenges the majority of homeowners face, despite a quicker recovery in both the bottom and top segments of the market (Graph 1).
- Regionally, we observed a small uptick in quarterly gains in both the West and Midwest, between 0.3 to 0.1 percentage points, respectively (Chart 1); while the Northeast and South remained unchanged over the quarter, at 0.2% and 0.8%, respectively. These minimal changes reinforce housing's continued moderation and suggest the initial thrust of the home buying season is starting to wane.
- Disparity still exists at the local market level. The Northeast reports the widest gap in price performance between the top and bottom performing MSAs with Pittsburgh and Providence at 14.1% and -14.1% year-over-year (Charts 1 and 2).
- At the national level, our data through July reports a 0.1 percentage point increase in quarterly gains, from 0.6% in June to 0.7% in July. While this minor increase, a carry-over from spring's performance, is expected as we enter the thick of summer's peak demand cycle, it reflects the overall contraction from spring's initial surge.
- Contact Brian Opsal for your July 2015 file of the Top 30 MSAs or access our data on the Bloomberg Professional service by typing CLCA <GO>.
"Through the first half of 2015, we observed a housing recovery that is normalizing after an impressive price surge from the trough of the market," says Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital. "After more than two years of a pretty remarkable upward swing, the housing market's correction-to-the-correction has given way to more normal rates of growth. What we now know, however, is that this correctionary period has not treated all markets, nor segments within markets, the same. In the present environment, micro analysis is key."
"In particular, our latest data exposed a mid-tier lag. This segment is still way behind both the top and bottom of the market in terms of recovery over the last nine years. When we analyzed the change in home prices since the summer of 2006, we observed that the mid-tier has lagged behind both the upper end and lower ends of the market by a surprisingly wide margin. At -24.8% below its peak level, the mid-tier is more than double that of the low-tier at -10.1% and more than 10 percentage points from the top-tier at -14.2%. The low-tier was both hit and buffered by high levels of distressed activity which, in recent years, has sparked investor activity driven in large part by the accelerated demand in the rental sector. And, the top-tier has benefited from a segment of the market that is more resilient to the current economic climate. The mid-tier's performance is concerning as it represents the key move-up buyer segment of the market. As long as this key segment is still fighting to regain an equity foothold, re-engagement back into the purchase market will continue to be on hold."
| National and Regional Markets | ||||||
| Market | Qtr/Qtr | Yr/Yr | Distressed Saturation | |||
| National | 0.7% | 5.1% | 15.4% | |||
| West | 1.3% | 7.4% | 10.8% | |||
| Northeast | 0.2% | 2.2% | 14.3% | |||
| South | 0.8% | 5.8% | 18.6% | |||
| Midwest | 0.4% | 4.4% | 17.9% | |||
| Chart 1. National and Regional Markets Through July 2015. Source: Clear Capital |
| Highest Performing Major Metro Markets | ||||||||
| Qtr/Qtr Rank |
Metropolitan Statistical Area | Qtr/Qtr |
Yr/Yr | Distressed Saturation | ||||
| 1 | Las Vegas, NV - Paradise, NV | 1.7% | 6.8% | 18.5% | ||||
| 2 | Dallas, TX - Fort Worth, TX - Arlington, TX | 1.7% | 10.2% | 3.7% | ||||
| 3 | Seattle, WA - Tacoma, WA - Bellevue, WA | 1.6% | 10.4% | 12.0% | ||||
| 4 | Denver, CO - Aurora, CO | 1.6% | 11.3% | 6.4% | ||||
| 5 | Tampa, FL - St. Petersburg, FL - Clearwater, FL | 1.5% | 8.2% | 27.8% | ||||
| 6 | Miami, FL - Ft. Lauderdale, FL - Miami Beach, FL | 1.4% | 9.7% | 24.8% | ||||
| 7 | Sacramento, CA - Arden, CA - Roseville, CA | 1.4% | 7.2% | 12.0% | ||||
| 8 | Phoenix, AZ - Mesa, AZ - Scottsdale, AZ | 1.4% | 6.6% | 11.1% | ||||
| 9 | Pittsburgh, PA | 1.4% | 14.1% | 9.2% | ||||
| 10 | San Francisco, CA - Oakland, CA - Fremont, CA | 1.3% | 8.3% | 6.0% | ||||
| 11 | Los Angeles, CA - Long Beach, CA - Santa Ana, CA | 1.3% | 7.7% | 8.9% | ||||
| 12 | Riverside, CA - San Bernardino, CA - Ontario, CA | 1.2% | 7.5% | 13.0% | ||||
| 13 | Portland, OR - Vancouver, WA - Beaverton, OR | 1.2% | 7.4% | 9.7% | ||||
| 14 | Orlando, FL | 1.2% | 6.5% | 30.4% | ||||
| 15 | San Jose, CA - Sunnyvale, CA - Santa Clara, CA | 1.2% | 8.2% | 3.9% | ||||
| Chart 2. Highest Performing Major Metro Markets Through July 2015. Source: Clear Capital |
| Lowest Performing Major Metro Markets | ||||||||
| Qtr/Qtr Rank |
| Metropolitan Statistical Area | Qtr/Qtr |
Yr/Yr | Distressed Saturation | |||
| 1 | Providence, RI - New Bedford, MA - Fall River, MA | -2.7% | -14.1% | 16.1% | ||||
| 2 | Baltimore, MD - Towson, MD | -0.4% | -2.9% | 26.7% | ||||
| 3 | Cleveland, OH - Elyria, OH - Mentor, OH | -0.3% | 0.5% | 19.0% | ||||
| 4 | Hartford, CT - West Hartford, CT - East Hartford, CT | 0.0% | -2.3% | 20.4% | ||||
| 5 | Milwaukee, WI - Waukesha, WI - West Allis, WI | 0.0% | 5.3% | 16.6% | ||||
| 6 | Boston, MA - Cambridge, MA - Quincy, MA | 0.1% | 0.7% | 9.5% | ||||
| 7 | Cincinnati, OH - Middletown, OH | 0.1% | 3.0% | 19.2% | ||||
| 8 | New Orleans, LA - Metairie, LA - Kenner, LA | 0.2% | 4.6% | 17.9% | ||||
| 9 | Rochester, NY | 0.2% | 1.2% | 8.7% | ||||
| 10 | Dayton, OH | 0.3% | 4.5% | 19.8% | ||||
| 11 | Washington, DC - Arlington, VA - Alexandria, VA | 0.3% | 2.1% | 13.3% | ||||
| 12 | Richmond, VA | 0.4% | 4.5% | 14.9% | ||||
| 13 | Houston, TX - Baytown, TX - Sugar Land, TX | 0.5% | 9.3% | 4.1% | ||||
| 14 | Louisville, KY | 0.6% | 4.1% | 13.8% | ||||
| 15 | Raleigh, NC - Cary, NC | 0.6% | 4.2% | 6.4% | ||||
| Chart 3. Lowest Performing Major Metro Markets Through July 2015. 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.
About Clear Capital
Clear Capital is a nationwide provider of real estate valuations, data and analytics, quality assurance services and technology solutions. The Company's customers include mortgage lenders, servicers, investors, GSEs, and Ratings Agencies. Clear Capital products include appraisals, broker price opinions, property condition inspections, value reconciliations, appraisal review and risk scoring, automated valuation models, and home data indices. The Company's innovative technology, experienced valuation experts, 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. Morningstar Credit Rating issued Clear Capital its highest Residential Vendor Ranking -- MOR RV1. 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.
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Contact Information:
Brian Opsal
Vice President, Marketing
brian.opsal@clearcapital.com
Phone: 530.550.2546
