Home Value Forecast examines importance of looking at local markets and MRI as an indicator of a real estate market’s health; update includes new top and bottom rankings for the month
WALTHAM, MA – July 22, 2015 – Pro Teck Valuation Services’ Home Value Forecast (HVF) July update examines months of remaining housing inventory (MRI), an important real estate indicator. HVF finds that in the 200 U.S. housing markets it tracks the MRI average is 6.11, a decrease of more than 12% from the same time last year. Also, HVF’s top and bottom market rankings for the month are updated.
“Home Value Forecast believes all real estate is local and that national numbers mean little when you are buying or selling in a particular market,” said Tom O’Grady, CEO of Pro Teck Valuation Services. “Although the national trend seems promising, it’s important to evaluate fundamentals at the metro level.”
O’Grady added that MRI is a reflection of supply and demand in a local real estate market – with a low MRI signifying a “seller’s market” and high MRI a “buyer’s market.”
This month’s HVF update examines the difference in MRI outliers, including metros areas with less than 4 MRI, which the authors consider “hotter” markets, as well as those with over 10 MRI as “cold.” The authors point out that the number of hot markets have increased 45% and the number of 10+ MRI areas have decreased 36% from the same time last year. In addition, they explore the top and bottom 10 MRI CBSAs for this month and find that eight of the top ten markets with lowest MRIs are in California as the West Coast regions continue to be hot. San Francisco is leading the pack with MRI of 1.51. The update also reports that the East Coast and rural CBSAs have the highest MRI numbers right now with Duluth, MN-WI rounding out the bottom with 35.09 MRI.
The authors also study the one-year change in their market condition rankings for the 200 CBSAs they track and find, in addition to MRI, other market indicators tell a similar story of an improvement in the overall health of the U.S. housing market.
“Home Value Forecast data shows that there was an increase in the number of strong markets, while the number of weak or distressed markets decreased,” added O’Grady. “While there is still work to be done and there are still communities suffering, the overall health of the U.S. housing market has improved.”
This month’s 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.
“The Western states continue to dominate the top ten with Bellingham, Phoenix and San Antonio rejoining the list. Interestingly there are fewer California markets on this list this month,” said O’Grady. “Continuing on the theme of this month’s updates, all of the top ten MRIs are less than 3.5.”
June’s top CBSAs include:
San Antonio-New Braunfels, TX
San Diego-Carlsbad, CA
San Jose-Sunnyvale-Santa Clara, CA
Santa Rosa, CA
“The bottom ten list is virtually unchanged from last month,” said O’Grady. “These communities continue to be plagued by higher percentages of foreclosure sales and higher MRI. Atlantic City, NJ and Jacksonville, NC are seeing MRI over 10 months.”
The bottom CBSAs for May were:
Lake County-Kenosha County, IL-WI
Atlantic City-Hammonton, NJ
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 @ProTeckServices.
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A Core Based Statistical Area (CBSA) is a U.S. geographic area defined by the Office of Management and Budget (OMB) based around an urban center of at least 10,000 people and adjacent areas that are socioeconomically tied to the urban center by commuting. The term “CBSA” refers collectively to both Metropolitan Statistical Areas (MSA) and micropolitan areas. Micropolitan areas are based around Census Bureau-defined urban clusters of at least 10,000 and fewer than 50,000 people. Metropolitan Statistical Areas (MSAs) are defined as urban clusters of more than 50,000 people.
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