And the #1 Housing Market is….

by devteam August 4th, 2015 | Share

Even though he has retired, don’t you sometimes just want tornsmack David Letterman?  The popularity ofrnhis Top 10 something or other lists have made the genre ubiquitous.  Apparently compiling them just toorntempting.  </p

Housing is no exception. rnIn the last month or so we have seen lists (and no longer limited to toprnten – 15 or 20 are increasingly common) of best cities (and worst) for firstrntime homebuyers, for growth, jobs, safety, and affordability. If your city orrntown hasn’t been deemed the best place for something you should probably firernthe mayor.</p

Today there were two more. rnRealtor.comrnreleased a list of the hottest housing markets in the country counting downrnfrom 20 and Clear Capital dug deeper, measuring market appreciation rates acrossrnprice ranges to dissect valuation risk and come up with top and bottomrnperforming markets.</p

Therntop 15 list is compiled by each month and Jonathan Smoke, thernwebsite’s chief economist said “Wernare now entering the time of the year when both inventory and demand typicallyrnreach their peak. The dog days of summer slow down the pace of activity, justrnas the school year creeps closer.</p

“This year we’re seeing inventoryrncontinue to grow in July, albeit at a slower pace than this spring,” herncontinued. “And while demand overall is strong, the trend in median days onrnmarket is suggesting that the market is finding more of a balance, which bodesrnwell for more moderate price appreciation in the months ahead.”  If there’s a more diplomatic way to say housing has topped out for 2015, we haven’t heard it.</p

This list is based on the median numberrnof days on market both to assess how quickly homes are selling and as anrnindicator of housing supply, or inventory. rnIt also factors in traffic and searches on the site whichrnthe report said continued to set new highs, “showing that there is still strongrndemand for homes.”</p

Overall data for the first three weeksrnof the month showed a 7 percent year-over-year increase in the median listrnprice and a 1 percent rise from June to $234,000.  Median days on market increased to 69 days,rndown 7 percent from last July but up 5 percent from the previous month.  Housing supply usually peaks in July orrnAugust as families rush to close before the school year begins.</p

The top 20 hottest median-sized tornlarge markets in the country are those where there is plenty of demand fromrnbuyers as measured by on-site listing views and homes are spending little timernon the market.  On average, these marketsrnreceive 1.5 to three times the number of views per listing compared with thatrnof the rest of the nation, and inventory is moving 24 to 41 days morernquickly. They have also seen days on market drop by a combined average of 14%rnyear over year.</p

“These hottest markets are the best inrnthe country from both a supply and demand perspective,” Smoke said. “Sellersrnare seeing listings move much more quickly than the rest of the country and atrnan accelerating pace from just last month. Meanwhile, these markets are clearlyrnattractive to buyers as the listings in these markets are viewed as much asrnthree times more often than the national average.”</p

Eleven of the 20 metro areas’s list are in California led by the San Francisco area.  Vallejo, Santa Rosa, and San Jose were 4rnthrough 6; San Diego was 8 and Santa Cruz 10.  Non-California cities in the top ten were (2)rnDenver, (3) Dallas, (7) Midland, and (9) Ann Arbor.  Starting with 11 the next ten in order are Detroit,rnSacramento, Stockton, Yuba City (California), Columbus (Ohio), Austin, LosrnAngeles, Oxnard, San Antonio, and Fort Wayne.</p

ClearrnCapital looked at market appreciation rates across tiers; the bottom 25rnpercent, middle 25 to 75 percent, and highest percent priced homes.  The data revealed that the low-tier hasrnreturned closest to peak 2006 levels; prices are about 10.1 percent below thosernpeaks while the mid-tier homes (generally selling between $120,000 and $345,000rnare still down almost 25 percent.  Thernhighest priced housing segment has returned to within 14.2 percent of peak.  The report notes that this difference in recoveryrnunderscores the continued challenges the majority of homeowners face, despite arnquicker recovery in both the bottom and top segments of the market.</p

Overallrnthe company’s Home Data Index (HDI) posted a 0.7 return in quarterly gains inrnJuly compared to 0.6 in June. </p

“Through the first half of 2015, we observed a housing recovery that isrnnormalizing after an impressive price surge from the trough of thernmarket,” says Alex Villacorta, Ph.D., vice president of research andrnanalytics. “After more than two years of a pretty remarkable upward swing,rnthe housing market’s correction-to-the-correction has given way to more normalrnrates of growth. What we now know, however, is that this correctionary periodrnhas not treated all markets, nor segments within markets, the same. </p

“In particular, our latest data exposed a mid-tier lag. This segment isrnstill way behind both the top and bottom of the market in terms of recoveryrnover the last nine years,” Villacorta said.  “The low-tier was both hit and buffered byrnhigh levels of distressed activity which, in recent years, has sparked investorrnactivity driven in large part by the accelerated demand in the rental sector.rnAnd, the top-tier has benefited from a segment of the market that is morernresilient to the current economic climate. The mid-tier’s performance isrnconcerning as it represents the key move-up buyer segment of the market. Asrnlong as this key segment is still fighting to regain an equity foothold,rnre-engagement back into the purchase market will continue to be on hold.” </p

Clear Capital names as its top 15 highest performing major marketsrn(identified by its largest city), Las Vegas, Dallas Ft. Worth, Seattle, Denver,rnTampa, Miami, Sacramento, Phoenix, Pittsburgh, San Francisco, Los Angeles, Riverside,rnPortland (Oregon), Orlando, and San Jose.</p

Conversely, those at the bottom included Providence, Baltimore, Cleveland,rnHartford, and Milwaukee.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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