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Home Value Forecast 12.18.2017
Home Value Forecast: An End of Year Review of the Residential Real Estate Market

Happy Holidays from all of us at Pro Teck Valuation Services!

For the year’s final Home Value Forecast, we examine trends over the past 12 months and list the Top Three CBSAs in the following categories:

  • Highest Current Sales Price
  • Current Months of Remaining Inventory
  • Twelve Month Sales Price Appreciation

California CBSAs Dominate Current Sale Price Category

In 2017, the three California metros of San Francisco, San Rafael and San Jose earned a place a top the list of CBSAs with Highest Current Sales Price.

The same three were also on the list in 2016. In fact, it’s been the same three CBSAs leading the way since we started this review in 2014. This year, the three are now the only CBSAs in the country whose average sales price exceed $1 million.

Here are 2016/2017 numbers:

Even more impressive, California CBSAs accounted for 12 of the top 15 spots in this category — with Vineyard Haven, MA (#4), Honolulu, HI (#8) and Seattle (#15) rounding out the rest of the list.

San Francisco’s employment is up over 28% from its most recent low in 2010. The real estate market is responding to this housing need by building more multi-family units, as is reflected in the number of permits pulled 2012-2017 (all above pre-crash numbers).

West Coast CBSAs Top List of Current Months of Remaining Inventory (MRI)

MRI is another indicator that shows how “hot” a market is at a particular time. MRI equals the number of households on the market divided by the number that sell per month. If an area has a high MRI (let’s say 10 months), it means that the market is saturated — a buyer’s market. If MRI is low (below 3 months) then it becomes a seller’s market. A “balanced” market will have approximately six months of inventory at any given time.

The top three markets of 2017 are all on the West Coast — San Jose, Seattle & San Francisco all have under two months of inventory, leading to fierce competition for homes and many selling for above asking price.

In total, there are 49 CBSAs with MRIs under three months – reflecting just how tight the housing market is right now. On the flip side, only three CBSAs have MRIs over 10 months.

Twelve-Month Sales Price Appreciation

In our report, sales price appreciation is calculated as the rolling three-month average sale price compared to the same time period from the previous year. Appreciation is a good thing, but the statistic by itself can be deceiving. Our top three for the year all had more than 15% appreciation, yet two different scenarios are playing out:

San Jose and Seattle have both been discussed as places of high real estate costs and low inventory leading to new highs each month.

Providence, on the other hand, has been slowly making up losses since the real estate crash. While not yet surpassing 2006 highs, Providence has been making up ground, now at a faster clip.

We will continue to watch to see if the trend continues in 2018.

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 insight 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