West Emerges As Housing Powerhouse
Go West, young homeowner, and grow with the country.
Clear Capital, Reno, Nev., says the West region is flexing its housing muscles like never before. Its monthly Home Data Index Market Report shows strong home sales in the West spurred home price gains that dwarfed the nation’s other regions.
The report said April sales in the West brought quarterly home price growth to 1.2 percent, up by 0.3 percent from the previous quarter. This compared to a national growth rate of 0.6 percent in the first quarter; an 0.7 percent gain in the South and an 0.2 percent gain in the Northeast and Midwest–nearly the same from the previous quarter.
Alex Villacorta, Clear Capital vice president of research and analytics, said while national growth as a whole was virtually unchanged, a sharp quarterly growth increase in the West is shaping up for yet another season of dominant performance in the region. He said the momentum shift in the West is setting the pattern for another strong summer growth season as the region begins to dominate regional performance once again.
“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,” Villacorta said.
The report said nine of the top 15 housing markets are in the West. Seattle continues to lead the nation with 2.0 percent growth over the past quarter, an increase of 0.2 percent just since March, while quarterly growth in Sacramento increased by 0.3 percent to 1.5 percent. The rest of the Western top markets are report at least 1.2 percent growth over the past quarter.
Clear Capital said, however, that each individual market in the region remains 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 10 years ago. And current distressed property saturation rates in cities such as 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,” Villacorta said.
Villacorta added that 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,” he said.
