SOURCE: Clear Capital

Clear Capital

July 11, 2016 03:00 ET

Clear Capital HDI Market Report -- The American South: A New Region to Watch?

RENO, NV--(Marketwired - July 11, 2016) -

Clear Capital's adjusted 2016 year-end forecast is in, and the numbers indicate that the nation will see a new regional front-runner as the South is expected to outpace the West over the next six months.

  • Nationally, quarter-over-quarter growth appears to be holding steady at the 0.6% growth mark with no change since last month. Additionally, the annual spring housing boom has been beneficial to most regions across the nation, with most markets outside of the Northeast seeing a small bump in quarter-over-quarter growth in the last month. Western QoQ growth has increased by 0.2% to 1.3%, while quarterly growth in the South and Midwest have increased to a modest 0.8% and 0.3% respectively.
  • However, growth figures in the Northeast are concerning -- our models are showing an average of zero price growth in the region over the last quarter. This is especially alarming when considering that the spring season is a time when markets typically gain momentum leading into the busy summer season. While prices in the region as a whole have appeared to stagnate, there are markets in the region that are performing positively, such as New York and Hartford, CT, where prices have increased by 0.5% and 0.7% respectively over the last quarter.
  • The regional year-end forecasts may also be a cause for concern, with the West and Northeastern regions projected to fall potentially into negative territory over the next six months. By the end of 2016, the nation may see a new leader in terms of regional growth -- the South and Midwest are predicted to have the highest price growth over the next six months, around the 0.5% mark. While these six-month growth rates are lower than what we have seen in recent years, slower growth does not necessarily spell disaster and instead could be indicative of markets that are finally beginning to moderate and even stabilize in these regions.
  • On the MSA level, southern cities are dominating the top spots in our forecast, with six of the top ten markets located within the region. Home prices in Dallas and Nashville are predicted to see stellar growth throughout the remainder of 2016, increasing to the tune of 3-4% by year's end. Major Florida markets are also predicted to continue to rise, with Jacksonville and Orlando growth forecasts around 2.5% by the end of 2016, while homes in Tampa may increase by almost 4% over the next six months.

"Overall, our forecasting models are predicting the second half of 2016 to be much slower than its start, with all regions forecasted to see very little price change by the end of the year. The Federal Reserve won't be raising interest rates this summer, and while this will help keep the cost of mortgage lending to a minimum, at least in the short term, there are other key global factors that could spell uncertainty for the American housing industry through the end of the year. Negative interest rates in several global markets may begin to push domestic interest rates down even further, which could have rather ambiguous effect -- either increasing demand due to the low cost of borrowing or leading consumers to lose precious confidence in the housing industry. It's still far too early to tell how the recent global economic and financial market shakeups will affect the US housing market, but our initial forecasts are very cautious about overestimating potential growth, particularly in the Northeast and West," states Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.

Top 30 MSAs June 2016
The June 2016 file of the Top 30 MSAs is available by accessing our data on the Bloomberg Professional service by typing CLCA <GO> or by contacting:

Brian Opsal
Vice President, Marketing
brian.opsal@clearcapital.com
Phone: 530.550.2546

About the Clear Capital® Home Data Index (HDI) Market Report

The Clear Capital HDI Market Report provides insights into market trends and other leading indices for the real estate market at the national and local levels. A critical difference in the value of the HDI Market Report is the capability of Clear Capital to provide more timely and granular reporting than nearly any other home price index provider.

  • Offers the real estate industry (investors, lenders, and servicers), government agencies, and the public insight into the most recent pricing conditions, not only at the national and metropolitan level, but within local markets as well.
  • Is built on the most recent information available from recorder/assessor offices, and then further enhanced by adding the company's proprietary streaming market data for the most comprehensive geographic coverage and local insights available.
  • Reflects nationwide coverage of sales transactions and aggregates this comprehensive dataset at ten different geographic levels, including hundreds of metropolitan statistical areas (MSAs) and sub-ZIP code boundaries.
  • Includes equally-weighted distressed bank owned sales (REOs) from around the country to give the most real world look of pricing dynamics across all sales types.
  • Allows for the most current market data by providing more frequent updates with patent pending rolling quarter technology. This ensures decisions are based on the most up-to-date information available.

Clear Capital® HDI Methodology

  • Generates the timeliest indices in patent pending rolling quarter intervals that compare the most recent four months to the previous three months. The rolling quarters have no fixed start date and can be used to generate indices as data flows in, significantly reducing the multi-month lag time experienced with other indices.
  • Includes both fair market and institutional (real estate owned) transactions, giving equal weight to all market transactions and identifying price tiers at a market specific level. By giving equal weight to all transactions, the HDI is truly representative of each unique market.
  • Results from an address-level cascade create an index with the most granular, statistically significant market area available.
  • Provides weighted repeat sales and price-per-square-foot index models that use multiple sale types, including single-family homes, multi-family homes, and condominiums.

About Clear Capital®

Clear Capital is a nationwide provider of real estate valuations, data and analytics, quality assurance services and technology solutions. The Company's customers include mortgage lenders, servicers, investors, GSEs, and Ratings Agencies. Clear Capital products include appraisals, broker price opinions, property condition inspections, value reconciliations, appraisal review and risk scoring, automated valuation models, home data indices, and platform solutions. The Company's innovative technology, experienced valuation experts, and a well-trained network of more than 30,000 field experts sets a new standard for accurate, up-to-date, and well documented valuation data and assessments. Morningstar Credit Rating issued Clear Capital its highest Residential Vendor Ranking - MOR RV1. Clear Capital's home price data can be accessed on the Bloomberg Professional service by typing CLCA <GO>.

The information contained in this report is based on sources that are deemed to be reliable; however no representation or warranty is made as to the accuracy, completeness, or fitness for any particular purpose of any information contained herein. This report is not intended as investment advice, and should not be viewed as any guarantee of value, condition, or other attribute.

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