Clear Capital: Early Spring Thaw Begins in the West
Clear Capital, Reno, Nev., said as the spring buying season kicks in, one key region–the West–may be gearing up at just the right time.
The company’s monthly Home Data Index report said growth in the West, along with a nationwide trend of decreasing distressed saturation rates indicates that the housing market is at its healthiest state since the crash in 2008.
The report said the West leads the rest of the country with quarterly growth at 1.3%, a sharp increase of 0.3% from 1.0% last month. Annual growth in the region bumped up to 8.1% from 7.6% last month. Current western quarterly and annual growth rates are significantly higher from a year ago, when rates were 0.9% and 7.4%, respectively.
“In addition, it looks like the spring buying season in this region is arriving at least a month earlier this year than last when quarterly growth didn’t cross over the single percentage mark until May,” said Clear Capital Senior Economic Analyst Allison Whealton.
National quarter-over-quarter growth reached 1.0% for the first time in 2017, a slight uptick from 0.9% in March, while annual growth held steady at 6.3% with no change from last month. National quarterly growth is double what it was a year ago (0.5%). The report said distressed saturation is also down significantly in the past year, dropping to 11.8% in April from 14.7% a year ago.
Other regions showed little change in April, suggesting the typical rush of spring buyers has not entered the market yet. However, first quarter growth in the South, Midwest and Northeast was still “considerably healthier” from a year ago, Clear Capital said. South quarterly growth rose to 0.9% from 0.6% a year ago, while Midwest quarterly growth improved to 0.8% from 0.3% a year ago. The Northeast saw the most marked quarterly growth, to 0.9% compared to just 0.2% a year ago.
San Antonio continues to be the fastest growing major metropolitan area in the nation as quarterly growth increased to 2.0% in April. Fresno moved up to second from the fourth spot, reaching 1.9% quarterly growth and 9.6% annual growth. Distressed saturation in Fresno is still relatively high for a Western metro at 11.5%, higher than the regional average by 3.2%, which Whealton said could point to a pocket of opportunity for investors who have been driven out of the bay area by high prices.
“It has been an impressive start to 2017 for the housing market,” Whealton said. “Nationally, home prices have increased twice as fast in Q1 2017 as they had in Q1 2016, and with the typical spring buying season just on the horizon, the next few months could be shaping up to be an impressive start to the busiest buying season.”
