Pro Teck Valuation Services' Home Value Forecast (HVF) in December takes a look at trends in a number of residential real estate categories over the past 12 months. HVF examines the top three CBSAs in Current Sales Price, Twelve Month Active List Price Appreciation, Current Months of Remaining Inventory and Twelve Month Sales Price Appreciation. It also looks back at the "Top Three" from last year to see how they are performing today.
Current sale price
The same three California metros: San Francisco, San Rafael and San Jose, top this list in 2014 and 2015. California CBSAs accounted for 13 of the top 15 spots in this category, with Honolulu, Hawaii (number four) and Vineyard Haven, Mass. (number seven) rounding out the rest of the list.
"Last year, we forecasted that San Francisco's home prices would start to stabilize—that did not happen as average sold price is now over $1.2 million," said Tom O'Grady, CEO of Pro Teck Valuation Services. "One reason for this was that interest rates have stayed at historic lows, making homes more affordable at all price points. With interest rate increases anticipated in the near future, we will keep an eye on the impact on 2016 home prices."
Twelve-month active list price appreciation
"Active price" is the median price a home is listing for at a moment in time. College Station-Bryan, Texas, led this year with an the active price change of 46.32 percent.
"An influx of professionals working in the Research Valley biocorridor has strained the housing stock and changed the type, size and cost of new housing," said O'Grady. "This trend should only continue as Texas A&M and the community drive advancements in the biotherapeutic and biopharmaceutical industries."
Current Months of Remaining Inventory (MRI)
MRI is another indicator that shows how "hot" a market is at a particular time. MRI equals the amount of households on the market divided by the number that sell per month.
"If an area has a high MRI (10 months), it means that the market is saturated—a buyer's market," said O'Grady. "If MRI is low (below three months) then it becomes a seller's market."
Today, the top three markets are West Coast, all around two months inventory—leading to fierce competition for homes and many selling for above asking price.
Two of the leaders in 2014, San Jose (2.03) and Santa Cruz (2.93), remained hot markets in 2015. In all, 24 CBSAs have less than three months of inventory, leading to limited housing supply and fueling price increases.
Twelve-Month Sales Price Appreciation
Sales price appreciation is a good thing, but the statistic by itself can be deceiving. The top three CBSAs all had more than 20 percent appreciation for the year, yet all were heavily impacted by the housing crisis.
"What these numbers reflect is that the market has responded to the bargains that are out there, and that the housing market has begun to reflect supply/demand fundamentals," said O'Grady. "Our top three are now seeing steady appreciation as they recover."
Of the 200 markets tracked at Home Value Forecast, 44 had greater than 10 percent appreciation this year, and only five had a negative change of more than five percent.
