Thirteen of the hardest hit housing markets during the housing downturn experienced significant home price growth rates in January, according to a monthly Property Intelligence Report (PIR) from DataQuick, a provider of advanced real estate information solutions powered by data, analytics and decisioning. These 13 housing markets’ growth rates range from 9 percent to 24 percent–which are well above the long-term home price growth rate.
“The January PIR reviews whether or not there is justification for these elevated growth rates, or if these growth rates are evidence of a new bubble forming in these areas,” said the report’s author, Gordon Crawford, Ph.D., vice president of Analytics for DataQuick. “Although these markets are rebounding, there is uncertainty as to whether or not they will sustain consistent growth.”
The national employment picture has been steadily improving, which is directly linked to housing growth in these thirteen markets. However, Crawford notes that recent growth rates might be compensating for excessive decreases in home prices experienced during the housing downturn.
“During the housing crisis, many were uncertain as to where the bottom in home prices had been reached; causing many owners and investors to patiently wait on the sideline,” said Crawford. “Once interested parties saw a market trough, they eagerly returned to the market.”
The report highlights that expectations of home price growth will begin to slow down in these markets to a level that can be supported by key demand drivers. “New residence construction has only grown at a moderate pace, with shadow inventory continuing to dampen home price growth as it comes to the market,” said Crawford.
DataQuick’s PIR leverages its national property database and analytics expertise to assess 42 of the largest counties in the United States using valuation trends, REO inventory trends and sales trends metrics.
Key findings for January include:
►Home price growth was positive in 35 of the 42 reported counties over the last month, quarter and year
►Sales increased in 12 of the 42 reported counties over the last month
►Sales increased in six of the 42 reported counties over the last quarter
►Sales increased in 33 of the 42 reported counties over the last year
►Foreclosures decreased in 29 of the 42 reported counties over the last month
►Foreclosures decreased in 29 of the 42 reported counties over the last quarter
►Foreclosures decreased in 26 of the 42 reported counties over the last year