Clear Capital: Affordability Factor Boosts in South While Western Growth Falls

 

Clear Capital, Reno, Nev., said housing price performance in the red-hot West showed signs of cooling, while the South and Midwest held steady.

The company’s November Home Data Index Market report said the South and Midwest each experienced a quarterly price growth increase of 0.1 percent from October, bringing quarter-over-quarter growth rates to 0.9 percent and 1.0 percent, respectively. While the West continued to outpace the rest of the nation at 1.1 percent quarterly growth, it represented a decrease from last month’s figures; Clear Capital Vice President of Research and Analytics Alex Villacorta said the slowing signaled “a potential loss in momentum” for the West.

“These three regions are now all within a 0.1 percent quarterly growth margin of each other–a first since Q4 2011, which coincidentally was the last time the West was not leading regional quarterly growth,” Villacorta said.

Villacorta noted the South hosts several of the nation’s top-performing and most talked about metropolitan markets, such as Dallas, Nashville and Miami. “Combined with its relatively low cost of living, the region appears to be gaining popularity among home buyers, signaling a new opportunity for investors and traditional homebuyers alike as affordability remains an issue in many other markets, namely those in the West and Northeastern regions,” he said.

Outside of these regions, quarterly growth in the Northeast held steady at 0.3 percent, no change from October. Nationally, quarterly home price growth has increased slightly, an uptick of 0.1 percent from 0.8 percent to 0.9 percent. Annual growth figures are also on the rise reaching 5.5 percent, a 0.3 percent improvement over annual growth rates from a year ago.

The report also noted nationwide distressed saturation rates fell by 0.7 percent from an average of 13.9 percent to 13.2 percent in just the past month, with the Western average decreasing to a current national low of just 9.2 percent.

Clear Capital said southern markets continue to dominate its list of top performing markets, with eight of the 15 top performing metros belonging to the region. Memphis, Tenn. led with a 2.6 percent price increase over the past quarter. Elsewhere in the nation, quarterly growth appears to be holding relatively steady or even slowing down as fall sales data begins to come in.

“Market performance in the South has been relatively impressive for 2016, as the median home price in the region has risen 5.7 percent since this time last year,” Villacorta said. “Even as markets in the region continue to post impressive gains, the median price per square foot in top performing southern markets remains well under the national benchmark.”

For the South region as a whole, Clear Capital reported the average price per square foot of $106, nearly $30 less than the national average at $135.