What is your definition of a “hot” real estate market?
A number of housing indexes have been reporting on “hot” markets this month. Many use yearly percent price change as the basis of their ranking, arguing that it alone shows the state of the local housing market.
Home Value Forecast believes that one needs to look at multiple criteria to gain a full view of the market. If one was only to look at sold price percent change, these would be the top five markets:
While Detroit has seen healthy gains this year, we don’t believe anyone would pick the city as being the hottest market in America. To further illustrate the point, let’s look at Detroit and San Francisco using Collateral Analytics Price Forecast:
As you can see, San Francisco home prices are at an all-time high while Detroit is still trying to return to pre-crash levels. In Home Value Forecast’s rating system Detroit’s market is considered “soft” while San Francisco is “strong.”
Looking at Port St. Lucie, FL we see the same thing. While recent gains have been encouraging, homes are still selling at 30% below previous highs. This, combined with foreclosure sales at more than three times post-crash levels, give the metro a “soft” rating in CA’s market condition scale.
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 to 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.
Top 10 CBSAs
Looking at our top three for the month using Collateral Analytics Forecast, we see three metros at or near all-time highs with forecasted continuing appreciation.
Bottom 10 CBSAs
Our bottom three metros show a different story. All are not expected to appreciate significantly over the next five years, leaving those that purchased at or near highs a cloudy picture as to when they might be able to make a profit on a sale.
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. To learn more about Home Value Forecast and Pro Teck’s full suite of residential real estate valuation products, visit www.proteckservices.com. You can also find Pro Teck on Twitter at @Pro TeckServices.
The monthly Home Value Forecast update also includes a listing of the 10 best and 10 worst performing metros as ranked by its market condition ranking model. The rankings are run for the single-family home markets in the top 200 CBSAs on a monthly basis. They highlight the best and worst metros with regard to a number of leading real estate market indicators including: sales/listing activity and prices, months of remaining inventory (MRI), days on market (DOM), sold-to-list price ratio and foreclosure percentage and REO activity.
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 Appraiser, Pro Teck Valuation Services
About Pro Teck Valuation Services
Pro Teck Valuation Services is a national provider of residential real estate valuations. For more than 30 years, we have worked with lenders, loan servicers and investors to improve risk management through superior real estate collateral information. Pro Teck offers a comprehensive suite of services including real estate data and analytics, field valuations, review/due diligence and appraisals. Please visit us at www.proteckservices.com.