Clear Capital: It’s Winter
Winter is here. And with winter, said Clear Capital, Reno, Nev., is a markedly slower growth rate in home prices.
The company’s Home Data Index Market Report said while over national growth appeared to run steadily, many local markets felt the crunch. Nationally, quarterly growth held steady at 0.7 percent. Regionally, only the West held steady at 1.0 percent quarterly growth, while the South, Northeast and Midwest all saw drops in quarterly growth rates (-0.1 percent, 0.1 percent and 0.2 percent, respectively.
However, data from local markets show the greatest drops. Dallas, one of the nation’s top performing metros of the past six months, saw home prices fall from an autumn peak of 2.0 percent quarter-over-quarter growth in October to just0.2 percent in January. San Jose also dropped from 2.5 percent quarterly growth in October to just 1.0 percent in January. San Francisco and Atlanta saw similar drops.
“The typical winter real estate slowdown appears to be in full effect, as growth is down across most of the nation’s markets,” said Alex Villcacorta vice president of research and analytics with Clear Capital. “While we would typically expect a market downtrend this time of the year due to an overall lower level of activity in the real estate market, there is added volatility in the market due to the implementation of TRID, the broader economic slowdown and the string of bad runs in the equity markets.”
Villacorta said these factors appear to be compounding the traditional wintry effect by adding to the overall uncertainty of the housing market, likely scaring off potential buyers, and driving overall demand downward.
“What remains to be seen, however, is just how long this icy winter weather will last,” Villacorta said. “If the lack of confidence and affordability in the housing market continues to crowd out some key segments of the housing market, namely first-time homebuyers, it could be a long winter for the nation’s real estate market. But, as the nation’s consumers begin to adjust to the new norm of a higher cost to entry, some individual markets may be able to stave off the cold winter and see spring come early,”
The report did note some markets held up well. Las Vegas saw a slight uptick in growth increasing from 0.9 percent to 1.1 percent. Providence, R.I., saw an unusually high 2.8 percent quarterly growth rate, from 0.5 percent the previous quarter, while Houston jumped from 1.0 percent to 1.5 percent.
