Clear Capital: Affordability Benefits South, Midwest while Western Growth Slows
Clear Capital, Reno Nev., predicted continued slowing in western U.S. markets, with the slack picked up by the South and Midwest.
The company’s monthly Home Data Index Market Report said national quarterly home price growth remained at 0.9 percent in January, while annual price growth rose slightly to 5.8 percent, an uptick of 0.2 percent from December. Regionally, Clear Capital said the South, Midwest, and West all continue to hover tightly around the 1.0 percent quarter-over-quarter growth mark, while the Northeast held steady at 0.5 percent.
However, Clear Capital Vice President of Research and Analytics Alex Villacorta said as some western housing markets continue to fall toward negative territory, the 2017 market forecast predicts the South and Midwest to rise above the rest of the nation. The regional forecast predicts an end to the dominating growth pattern of the West of recent years, where year-over-year growth once crested at more than 17 percent in 2013. Instead, the forecast predicts the South will be the top performing region during 2017 with an estimated 3.5 percent annual growth, with the Midwest close behind at an estimated 3.4 percent annual growth. Western home prices are predicted to slow to 1 percent.
“As distressed saturation continues to decrease – and with it, affordability – some markets in the West are turning negative; thus, growth in the West is predicted to greatly slow over the coming year,” Villacorta said. “Affordability will be a top concern during 2017, particularly in the West, where rapid price growth during the housing recovery has pushed prices out of the affordable range for most buyers.”
The report also noted as prices across the nation continue to move upward even in winter, the distressed saturation fell by another 0.3 percent from December, bringing the national average to 12.5 percent, the lowest level since before the market crash.
Clear Capital said the Dallas-Fort Worth metro–the second-fastest growing major metro market in the nation during 2016 with annual growth topping 13 percent–is forecasted to be 2017’s top performer with an estimated 11 percent growth over the next year. Other top forecasted metros include Denver (7.3 percent), Nashville (7.2 percent), Milwaukee (7.1) percent and Jacksonville (6.6 percent).
Near the bottom of the top forecasted performers list is San Jose, which reported -0.3 percent quarterly price growth last month, where prices are predicted to virtually stand still over the course of 2017. A similar forecast is predicted for another formerly top performing California market, Riverside, Calif., which is forecasted to turn negative by the end of 2017.
