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Healthy Housing Trends Headed East

In last month’s Home Value Forecast’s top ten ranking, the Durham-Chapel Hill, NC CBSA was the lone East Coast representative — this month half of the top ten are from the East.

Looking deeper into the ranking shows that out of the 35 CBSAs labeled “hot” in the Collateral Analytics market condition ranking, 18 of them are from eastern states.

Markets Ranked “Hot”

pro teck top performing housing markets map

CBSA NAME MRI Sold Price
Bend-Redmond, OR 3.5  $340,000
Boise City, ID 2.08  $212,375
Charleston-North Charleston, SC 3.61  $256,480
Chattanooga, TN-GA 4.51  $172,613
Colorado Springs, CO 3.54  $250,050
Durham-Chapel Hill, NC 3.29  $247,000
Eugene, OR 2.67  $242,500
Fresno, CA 2.73  $235,700
Green Bay, WI 4.52  $156,000
Johnson City, TN 5.59  $156,000
Kansas City, MO-KS 3.45  $190,000
Knoxville, TN 4.58  $179,000
Lafayette-West Lafayette, IN 2.97  $149,450
Lewiston-Auburn,  ME 3.46  $148,750
Minneapolis-St. Paul-Bloomington, MN-WI 2.94  $245,000
Modesto, CA 2.39  $264,700
Mount Vernon-Anacortes, WA 2.61  $299,450
Nashville-Davidson–Murfreesboro–Franklin, TN 3.33  $243,000
Oak Harbor, WA 3.03  $317,250
Ogden-Clearfield, UT 3.3  $233,500
Olympia-Tumwater, WA 2.86  $269,000
Portland-South Portland,  ME 3.99  $248,750
Portland-Vancouver-Hillsboro, OR-WA 2.48  $350,000
Raleigh, NC 3  $252,000
Richmond, VA 2.64  $232,000
Sacramento–Roseville–Arden-Arcade, CA 2.34  $342,007
Salt Lake City, UT 3.46  $282,500
Silver Spring-Frederick-Rockville, MD 3.4  $473,750
Spartanburg, SC 4.96  $138,550
Stockton-Lodi, CA 2.45  $300,000
Tallahassee, FL 5.81  $182,500
Tucson, AZ 4.29  $195,000
Visalia-Porterville, CA 3.8  $205,000
Winston-Salem, NC 5.2  $155,000
Yuba City, CA 2.58  $240,000

Looking at all seven of the market condition ratings shows that almost 70% of the CBSAs tracked are in a “normal” condition or better – further evidence of a broad recovery.

 

             Market Condition
Ranking Percent CBSAs
Hot 15.35%
Strong 29.82%
Good 15.35%
Normal 9.21%
Soft 27.19%
Weak 1.75%
Distressed 1.32%

Favorable real estate trends that started out west are spreading across the country. If interest rates stay in check and there are no other surprises, we forecast further recovery in the year to come. Also, while housing starts nationally are still below pre-crash levels, they are also at the highest levels since 2007. More housing will undoubtedly bring balance to areas with limited inventory.

CBSA Winners and Losers

Each month, Home Value Forecast uses a number of leading real estate market-based indicators to rank the single-family home markets in the top 200 CBSAs and highlight the strongest and weakest metros.

The ranking system is purely objective and is based on directional trends. Each indicator is given a score based on whether the trend is positive, negative or neutral for that series. For example, a declining trend in active listings would be positive, as will be an increasing trend in average price. A composite score for each CBSA is calculated by summing the directional scores of each of its indicators. From the universe of the top 200 CBSAs, we highlight each month the CBSAs which have the highest and lowest composite scores.

The tables below show the individual market indicators that are being used to rank the CBSAs, along with the most recent values and the percent changes. We have color-coded each of the indicators to help visualize whether it is moving in a positive (green) or negative (red) direction.

Home Value Forecast Top Ten CBSAs

Real Estate Market Trends August 2016 - 1

In the top ten it’s all about inventory. The number of homes for sale are down 10-50%, leading to low months or remaining inventory (MRI) and high competition for houses that are available.

One reason for this is the lack of new housing starts during the crash. Let’s look at housing starts in Richmond, VA for example.

Richmond 2

For more than ten years, between 6-8,000 single family homes were added to the community – this has been cut in half over the last eight years, leading to today’s limited supply.

The uptick in permits in Richmond is being seen across the country as builders continue to ramp up construction. Balance should return as new construction increases.

Home Value Forecast Bottom Ten CBSAs

Real Estate Market Trends August 2016 - 2

Three Michigan CBSAs are still having a rough go with foreclosures stifling the recovery.

Flint’s REO inventory has been high for nine years, dragging down prices and not allowing any substantial appreciation.

Real Estate Market Trends August 2016 - 4

Also, Flint’s water crisis is not over – unfiltered water still has high levels of lead. Peter Muennig, a professor of public health at Columbia University, has calculated that the 8,000+ Flint children found with elevated blood lead levels since 2014 will lead to $395 million in social costs for those exposed.

The Federal Emergency Declaration issued over Flint expired on August, 14. While the water issues are not fully solved, there has been progress. Here’s hoping for further the type of progress that brings people and businesses back to the area.

About Home Value Forecast

Home Value Forecast (HVF) is brought to you by Pro Teck Valuation Services. HVF provides insight into the current and future state of the U.S. housing market, and delivers 14 market snapshot graphs from the top 30 CBSAs.

HVF is built using numerous housing and economic data sources. The top 750 CBSAs as well as data down to the ZIP code level for approximately 18,000 ZIPs are available with a corporate subscription to the service.

Also, Pro Teck Valuation Services offers reporters the following:

  • National, regional or metro level housing data
  • Monthly Updates and HVF Insights articles
  • By-request data for your story — custom data, heat maps and charts are available
  • Expert commentary from Home Value Forecast Editorial Committee:
    • Tom O’Grady, Chief Executive Officer, Pro Teck Valuation Services
    • Michael Sklarz, PH.D., President, Collateral Analytics
    • Jeff Dickstein, Chief Compliance Officer, Pro Teck Valuation Services

 

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