While national home sale growth as a whole is virtually unchanged, a sharp quarterly growth increase in the West is shaping up for yet another season of dominant performance in the region, according to Clear Capital's recently released its Home Data Index™ (HDI) Market Report with data through April 2016. The report provides insights into housing price trends and other leading indices for the real estate market at the national and local levels.
Nationally, growth continues at a moderate pace of 0.6 percent quarter-over-quarter growth, but regionally the rates are varied. The Northeast and Midwest regional quarterly growth rates stay in the black but are sluggish at only 0.2 percent quarterly growth, while the South is reporting a reasonable 0.7 percent QoQ growth rate. These rates come with little to no change from the previously reported quarterly growth rates, all within 0.1 percent of the figures from last month.
The big story is out West, where sales during the month of April have really kicked off the start of the real estate busy season; quarter-over-quarter growth has increased 0.3 percent from 0.9 percent to 1.2 percent since just last month. This momentum shift is setting the pattern for another strong summer growth season as the region begins to dominate regional performance once again.
The continued dominance of the West is easy to see on our list of Highest Performing Major Metro Markets, where nine of the current top 15 call the region home. Seattle continues to lead the nation at an impressive 2.0 percent growth over the last quarter, an increase of 0.2 percent since last month, while quarterly growth in Sacramento has increased 0.3 percent to 1.5 percent QoQ. The rest of the Western top markets are all reporting at least 1.2 percent growth over the last quarter.
Despite these pacesetting performances by Western metros, the condition of each individual market in the region is varied. Portland, San Jose, and Denver have all surpassed their previous peak market values from before the crash, with Seattle fast approaching its own benchmark; however, homes in Las Vegas are fetching just over half of peak market values from ten years ago. A second metric we’ve taken a peek into is the percentage point improvement in the peak distressed saturation rate for each MSA, where some cities have seen incredible performance. The current distressed property saturation rates in cities like Sacramento and San Diego have improved by 50 percentage points or more, illustrating a drastic improvement in the overall health of the market, and yet both markets have quite a way to go to recovering all market value lost during the crash.
“Real estate market headlines have repeatedly documented the strong, potentially bubble-like recovery of the West over the past couple years, and this continued trend of performance doesn’t appear to be going away just yet,” says Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital. “However, it’s important to remember just how varied the standing of each of these Western metro’s recoveries remains. While the West as a whole has seen incredible performance since the lows of 2011, comparisons between individual markets like Denver and Las Vegas can be a sobering reminder of the devastating effects of the crash and that some markets still have a long way to go in terms of regaining lost value. Conversely, those markets that are reaching new market highs are worth keeping a close eye on since the speed at which those recoveries have occurred is clearly unsustainable in the long term.”