Welcome!

News Feed Item

Will Phoenix Rise Again? Not in the Foreseeable Future

The Housing Recovery, in Need of New Heroes, Looks to the West, but Not for Long

TRUCKEE, CA--(Marketwired - August 04, 2014) - Clear Capital (www.ClearCapital.com), the premium provider of data and solutions for real estate asset valuation and collateral risk assessment, today released its Home Data Index™ (HDI) Market Report with data through July 2014. Using a broad array of public and proprietary data sources, the HDI Market Report publishes the most granular home data and analysis earlier than nearly any other index provider in the industry.

  • As opportunity for discounted deals dry up, so too does a portion of the recovery-driving demand. National yearly growth fell from 9.0% last month to 8.4% in July. Just as national home price growth continued to contract in July, so too followed distressed sales. As a percent of all sales, distressed sales fell to 18%, a stark reduction since its peak of 40.8% in March of 2011. The major shift in home sale type, from distressed to fair market, will continue to impact future growth potential for markets overall, and begs the question: Will home price gains continue to fall past the historical range of 3%-5% as discounted deals dry up? Or, will they stabilize to sustain moderate long term growth? Clear Capital's forecast through 2015 shows national home prices will rise just 1.5%, indicating prices may not have the strength to stabilize within this historical range of growth.
  • While the West continues to dominate regional gains with eight of the top 15 major metro markets, the MSAs within the region are not immune to the strong moderating patterns unfolding across the country. Each market has its own unique demand drivers, yet similarities exist. Some Western markets like Phoenix and Riverside are seeing a strong pull back from their investor-fueled first in, first out (FIFO) recovery paths while others, like San Jose and Seattle, are experiencing moderation alongside strong local economic foundations.
  • Spoiler alert. Even though these outliers continue to see strong local economies drive demand, it may not be enough in 2015. The West is projected to see price declines of 0.8% through 2015, while the historically volatile Midwest could be home to the recovery's next group of heroes, with leading forecasted growth of 3.4%.
  • Glaringly missing from July's Top 15 list is the recovery darling, Phoenix. Once the exemplar of a recovering market, Phoenix has suffered from the effects of waning investor demand. In July, Phoenix yearly price growth softened to 10.4%, while distressed saturation fell to 13.5%. This is a significant reversal from more than 60% distressed saturation in March 2011, and a cumulative recovery of 62.3% home price appreciation. Following these notable gains, Phoenix is nearly in line with 2004 price levels, off by just 5%, suggesting Phoenix is where it needs to be. But can it stay there through 2015? Forecasts show Phoenix should see 2.6% through 2015, a sobering, yet realistic, rate of stable growth for the market.
  • Even the current recovery leader, Riverside, is going down the price path of Phoenix. Over the past two years, prices in the MSA have appreciated by a total of 53.2%, while distressed saturation has fallen from 68% to just 15.5%. Riverside's quarterly and annual growth led the top 50 metro markets in July at 2.1% and 18.3%, respectively. Despite these seemingly strong growth trends, yearly growth in Riverside has fallen 6.6 percentage points from 25% at the start of 2014, and quarterly growth has been cut by more than half over the same timeframe. Forecasts through 2015 show expected losses for the metro of 1.1%, indicating Riverside could see continued moderation turn to losses in the near future.
  • Contact Alanna Harter for your July 2014 file of the Top 30 MSAs or access our data on the Bloomberg Professional service by typing CLCA <GO>.

"The force of moderation in July trends raises questions around the market's ability to sustain gains through 2015," said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. "Relatively speaking, a national yearly growth rate of 8.4% is not alarming, but it's the path by which we got there that is of concern. Today's annual rate is over three percentage points lower than it was at the start of the year, and recall that the summer is supposed to be the highlight of the housing cycle. At the metro level, we are taking notice of stronger drops, like in Riverside and Phoenix. Forecasts through 2015 indicate that there are several markets that are not going to be immune to declines, and with a national forecast of just 1.5% price growth over the next 18 months, there will not be much of cushion for any sort of hiccup in the broader economy.

"We expect growth rates to vary more significantly across markets over the next year as local drivers such as confidence and job opportunities ebb and flow. This will be a very unique time for the market as the level of investor activity gives way to the traditional home buying segment. Whether this segment is willing and able to make a commitment on a home purchase remains to be seen, but we know from history that if it were to happen this year, it would have happened by now.

"With many markets moving past the driving forces and fallout of the bubble, we'll see increasing numbers of metros across the country take their own path, with future declines and unsettled price dynamics all part of the new normal landscape."

About the Clear Capital® Home Data Index™ (HDI) Market Report

The Clear Capital HDI Market Report provides insights into market trends and other leading indices for the real estate market at the national and local levels. A critical difference in the value of the HDI Market Report is the capability of Clear Capital to provide more timely and granular reporting than nearly any other home price index provider.

The Clear Capital HDI Market Report

  • Offers the real estate industry (investors, lenders, and servicers), government agencies, and the public insight into the most recent pricing conditions, not only at the national and metropolitan level, but within local markets as well.
  • Is built on the most recent information available from recorder/assessor offices, and then further enhanced by adding the company's proprietary streaming market data for the most comprehensive geographic coverage and local insights available.
  • Reflects nationwide coverage of sales transactions and aggregates this comprehensive dataset at ten different geographic levels, including hundreds of metropolitan statistical areas (MSAs) and sub-ZIP code boundaries.
  • Includes equally-weighted distressed bank owned sales (REOs and short sales) from around the country to give the most real world look of pricing dynamics across all sales types.
  • Allows for the most current market data by providing more frequent updates with patent pending rolling quarter technology. This ensures decisions are based on the most up-to-date information available.

The Clear Capital HDI Methodology

  • Generates the timeliest indices in patent pending rolling quarter intervals that compare the most recent four months to the previous three months. The rolling quarters have no fixed start date and can be used to generate indices as data flows in, significantly reducing the multi-month lag time experienced with other indices.
  • Includes both fair market and institutional (real estate owned) transactions, giving equal weight to all market transactions and identifying price tiers at a market specific level. By giving equal weight to all transactions, the HDI is truly representative of each unique market.
  • Results from an address-level cascade create an index with the most granular, statistically significant market area available.
  • Provides weighted repeat sales and price-per-square-foot index models that use multiple sale types, including single-family homes, multi-family homes, and condominiums.

About Clear Capital®

Clear Capital (www.ClearCapital.com) is the premium provider of data and solutions for the mortgage finance industry. The Company's products include appraisals, broker price opinions, property condition inspections, value reconciliations, automated valuation models, quality assurance services, and home data indices. Clear Capital's combination of progressive technology, high caliber in-house staff, and a well-trained network of more than 40,000 field experts sets a new standard for accurate, up-to-date, and well documented valuation data and assessments. The Company's customers include the largest U.S. banks, investment firms, and other financial organizations. Clear Capital's home price data can be accessed on the Bloomberg Professional service by typing CLCA <GO>.

The information contained in this report is based on sources that are deemed to be reliable; however no representation or warranty is made as to the accuracy, completeness, or fitness for any particular purpose of any information contained herein. This report is not intended as investment advice, and should not be viewed as any guarantee of value, condition, or other attribute.

Image Available: http://www.marketwire.com/library/MwGo/2014/8/1/11G019440/Images/Phoenix_vs._Riverside_V3-30710852601.jpg
Image Available: http://www.marketwire.com/library/MwGo/2014/8/1/11G019440/Images/National_and_Regional_Markets_-_July_2014-193891737125.jpg
Image Available: http://www.marketwire.com/library/MwGo/2014/8/1/11G019440/Images/Highest_Performing_Major_Metro_Markets_-_July_2014-1103064167304.jpg
Image Available: http://www.marketwire.com/library/MwGo/2014/8/1/11G019440/Images/Lowest_Performing_Major_Metro_Markets_-_July_2014-901785239421.jpg

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Cloud promises the agility required by today’s digital businesses. As organizations adopt cloud based infrastructures and services, their IT resources become increasingly dynamic and hybrid in nature. Managing these require modern IT operations and tools. In his session at 20th Cloud Expo, Raj Sundaram, Senior Principal Product Manager at CA Technologies, will discuss how to modernize your IT operations in order to proactively manage your hybrid cloud and IT environments. He will be sharing bes...
Everywhere we turn in our industry we can find strong opinions about the direction, type and nature of cloud’s impact on computing and business. Another word that is used in every context in our industry is “hybrid.” In his session at 20th Cloud Expo, Alvaro Gonzalez, Director of Technical, Partner and Field Marketing at Peak 10, will use a combination of a few conceptual props and some research recently commissioned by Peak 10 to offer a real-world consideration of how the various categories of...
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
Most DevOps journeys involve several phases of maturity. Research shows that the inflection point where organizations begin to see maximum value is when they implement tight integration deploying their code to their infrastructure. Success at this level is the last barrier to at-will deployment. Storage, for instance, is more capable than where we read and write data. In his session at @DevOpsSummit at 20th Cloud Expo, Josh Atwell, a Developer Advocate for NetApp, will discuss the role and value...
SYS-CON Events announced today that Outscale, a global pure play Infrastructure as a Service provider and strategic partner of Dassault Systèmes, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2010, Outscale simplifies infrastructure complexities and boosts the business agility of its customers. Outscale delivers a secure, reliable and industrial strength solution for its customers, which in...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus intern...
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
In order to meet the rapidly changing demands of today’s customers, companies are continually forced to redefine their business strategies in order to meet these needs, stay relevant and continue to see profitable growth. IoT deployment and development is integral in this transformation, and today businesses are increasingly seeing the value of investing their resources into IoT deployments. These technologies are able increase ROI through projects such as connecting supply chains or enabling sm...
Regardless of what business you’re in, it’s increasingly a software-driven business. Consumers’ rising expectations for connected digital and physical experiences are driving what some are calling the "Customer Experience Challenge.” In his session at @DevOpsSummit at 20th Cloud Expo, Marco Morales, Director of Global Solutions at CollabNet, will discuss how organizations are increasingly adopting a discipline of Value Stream Mapping to ensure that the software they are producing is poised to o...
This talk centers around how to automate best practices in a multi-/hybrid-cloud world based on our work with customers like GE, Discovery Communications and Fannie Mae. Today’s enterprises are reaping the benefits of cloud computing, but also discovering many risks and challenges. In the age of DevOps and the decentralization of IT, it’s easy to over-provision resources, forget that instances are running, or unintentionally expose vulnerabilities.
In his opening keynote at 20th Cloud Expo, Michael Maximilien, Research Scientist, Architect, and Engineer at IBM, will motivate why realizing the full potential of the cloud and social data requires artificial intelligence. By mixing Cloud Foundry and the rich set of Watson services, IBM's Bluemix is the best cloud operating system for enterprises today, providing rapid development and deployment of applications that can take advantage of the rich catalog of Watson services to help drive insigh...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.