Jacksonville ranks 9th on the Top 15 U.S. Markets by Clear Capital

13 12 2011

Clear Capital released its Home Data Index (HDI) Market Report with data through November 2011.

Report highlights include:

– U.S. quarter-over-quarter home prices hold their ground and post an increase of 0.3%, while REO saturation rates remain near 25%.
– Quarterly price movements have become more aligned across the four regions within the U.S., with only 2.0 percentage points separating the highest performing region (Midwest at 1.2%) and the lowest performing region (West at -0.8%).
– Though the national year-over-year price change of -2.2% showed slight improvement over last month’s report (-2.8%), it marked 14 consecutive months of yearly declines.
– REO saturation rates remain stable nationally at 24.6% of all transactions.
– The Atlanta MSA bucked the nationwide trend of stability, posting a -9.7% drop in prices quarter-over-quarter.

“The overall market stability in this month’s report gives me hope that housing markets are settling after a very turbulent two years,” said Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital. “With only a one percent drop in national home prices since January and virtually no change in prices over the last six months, strong evidence suggests the big swings that many market participants are accustomed to could become a thing of the past.

“Although many of the nation’s major markets are experiencing no significant movement in prices, there are still several micro markets that are underperforming the overall market due to high levels of REO saturation. As lien holders continue to process their foreclosures and the flow of REOs continue to come to market, it will be critical for industry participants to ensure they understand the micro economic nature of specific markets.”

Regional Market Overview (Nov. 2010 to Dec. 2011)

Regional Market Overview (Nov. 2010 to Dec. 2011)

Prices Flat as the Great Plains

– National home prices saw little movement across quarterly, six month, and yearly time periods.
– The West region experienced a slight improvement in quarterly price performance with a smaller decline than last month, and remains the weakest of the four regions.
– The Midwest, South and Northeast regions each turned in positive, but weaker quarterly numbers, compared to last month’s report.

The 0.3% increase for U.S. national home prices, after the 0.6% reported last month shows national home price gains continuing to stabilize and soften from those seen over the summer buying season.

Three of the four regions were generally flat, posting price changes of less than one percent quarter-over-quarter. The Midwest was the only region to see prices move above that threshold with a stronger 1.2% quarterly gain.

The West remained the only region to experience a quarterly price decline of -0.8%, showing a modest improvement over last month’s -1.0%. As this improvement comes at the beginning of the winter slow down, it suggests the stubborn quarter-over-quarter and year-over-year declines seen consistently in the hard hit region may be easing.

15 Highest and Lowest Performing Metro Markets (Nov. 2010 to Dec. 2011)

15 Highest and Lowest Performing Metro Markets (Nov. 2010 to Dec. 2011)

Highest Performing Markets: Holding Fast to Modest Gains

– Quarter-over-quarter gains for the highest performing markets continue to soften.
– Quarterly REO saturation rates hold steady on average, staying below the national rate.
– Four Florida markets maintain positions among the “top 15” list for a second consecutive month.

The highest performing markets continue to weaken quarter-over-quarter, with Washington, D.C. topping the list with 4.8% growth. Even though as a whole, this group hasn’t experienced returns this low since June 2011, each of the 15 markets continued to post quarterly gains. The overall performance of the group has stabilized and tightened, with only 3.1% separating the highest performing market (Washington, D.C.) from the 15th place market (Cleveland).

Four Florida markets (Orlando, Tampa, Jacksonville and Miami) continue to keep their positions among the highest performing markets quarter-over-quarter, rebounding from the steep drops and high levels of foreclosures they experienced over the past two years. Orlando and Miami also show strong year over year performance, topping the list with 5.9% and 5.4% growth respectively. The strong upward price movement for these Florida markets has correlated with a 12% drop in REO saturation over the last year at the state level. The growth in Florida’s MSAs must be described in proper perspective against the state’s precipitous -59.1% drop in prices from peak values in 2006 to today.

The average REO saturation among the top performing 15 markets is steady at 21.6%, trending well against last month’s 22.8% and solidly below the national average of 24.6%. This is a strong contributor to the group’s price stability and performance.

Lowest Performing Markets: Stabilizing, but Fighting REO Saturation

– Atlanta’s quarterly drop is more than double the decline of second place Seattle.
– REO saturation rates remain high but stable for the low performing MSAs, averaging 30.0%.
– Home prices in the Atlanta MSA experienced a very sharp quarter-over-quarter decline, with a notably high REO saturation rate of 42.8%. The increase in REO as a percentage of all sales is the result of a decrease in overall transactions and inflow of distressed properties, and is most likely creating the downward pressure on prices.

Aside from Atlanta, the lowest performing markets didn’t see much change in the rates of decline quarter-over-quarter from last month’s report, averaging -2.3% decline this month compared to -1.7% last month. The average REO saturation rate for the group was mostly unchanged from last month at 30.0%.

In contrast to the steep declines in Atlanta, the Dallas MSA posted a very mild quarter-over-quarter decline of -0.4%. This market has performed relatively well in recent past and is the only MSA on this list to boast a positive year-over-year price increase, at 1.6%. Though this gain is modest, it outpaced the rate of year-over-year growth in nine out of 15 markets on this month’s highest performing markets list.

Overall, the moderation and tightness of price decreases and stability of REO saturation for the lowest performing markets do provide for some degree of optimism for the market as a whole as we move into the softer winter buying season.

Source: Clear Capital

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