Pro Teck Valuation Services’ April Home Value Forecast (HVF) drills down from a macro to a micro level, where there is an evident mix of “hot” and “cool” real estate markets. The two metros highlighted in this month’s update are Phoenix, AZ, and Cleveland, OH.
“Based on the past, current and predicted housing market trends from our Home Value Forecasts, Phoenix’s outlook looks fruitful and faster-moving, while Cleveland’s (although it may be a buyer’s market to some) overall recovery is more complicated and sluggish,” said Tom O’Grady, CEO of Pro Teck Valuation Services. “In Phoenix, demand remains high and market fundamentals are strong. Below six months of remaining housing inventory supports this, as do active listing prices and sale prices, which are respectively up by 27 percent and 15 percent.”
Though employment rates and job growth are on the upswing, April’s Home Value Forecast indicates that Cleveland is still a step or two behind Phoenix’s recovery — just now in the early stages of nursing a market back to solid fundamentals. The monthly update also reports that Cleveland’s foreclosures are on the higher side – one of the main reasons that the metro area appears in HVF’s ‘Bottom 10’ this month. April’s update reports the difference in the foreclosure discount between the markets, which also is an indicator in the market’s recovery. The update shows that Cleveland’s REO discount has been 53 percent to 65 percent over the last three years, Phoenix has been between nine percent and 19 percent.
“Unlike Phoenix, Cleveland’s REO foreclosure issue faces further challenges than just a late start. Ohio is a judicial state, meaning that every foreclosure must cycle through a court proceeding before being eligible for purchase (unlike Arizona, where speedier non-judicial foreclosures cleared up the bulk of REO inventory by 2012),” added O’Grady.
This month’s Home Value Forecast update also includes a listing of the 10 best and 10 worst performing metros as ranked by its market condition ranking model. The rankings are run for the single- family home markets in the top 200 CBSAs on a monthly basis. They highlight the best and worst metros with regard to a number of leading real estate market indicators, including: sales/listing activity and prices, months of remaining inventory (MRI), days on market (DOM), sold-to-list price ratio and foreclosure and REO activity.
“California keeps leading the charge, with eight of our top 10 metros from the state,” said O’Grady. “Three years ago, much of the bad news was centered in California, a non-judicial state. Foreclosures were driving down prices, there were massive losses, and people were wondering where the bottom of the market was and when it would be reached. The glut of low priced foreclosures were snatched up, primarily by large investors who saw the ‘reo to rental’ opportunity and peak foreclosure activity came and went. Now these markets are leading the recovery.”
April’s top CBSAs include:
Los Angeles-Long Beach-Glendale, CA
San Rafael, CA
Santa Rosa, CA
Oxnard-Thousand Oaks-Ventura, CA
San Diego-Carlsbad, CA
San Francisco-Redwood City-South San Francisco, CA
San Luis Obispo-Paso Robles-Arroyo Grande, CA
“Positive trends are much more evident in our bottom 10 than in previous months, particularly with months of remaining Inventory, sales prices, and active days on the market,” added O’Grady. “Also of note is that all of the metro areas in our bottom 10 except for Little Rock, AR are from judicial states.”
The bottom CBSAs for April were:
Fort Lauderdale-Pompano Beach-Deerfield, FL
Kansas City, MO-KS
Miami-Miami Beach-Kendall, FL
Tampa-St. Petersburg-Clearwater, FL
West Palm Beach-Boca Rotan-Delray Beach, FL
Little Rock-North Little Rock-Conway, AZ