Taylor Scott International News
Home price growth across the US has softened for six months in a row with experts warning that the overall health and recovery of the residential real estate market is far from guaranteed. National home prices in April were up 5.1% year on year but while the quarterly rate of growth continued its path to normalisation coming in at 0.5%, according to the latest data from real estate firm Clear Capital. Most of the regions sustained price growth through the winter, but the Midwest is already seeing negative quarterly declines of 0.10% Midwest and the region remains volatile. The report points out that for nearly seven years, it has struggled to get on equal footing with the nation. Within the top performing markets for April, eight are Western markets. While the West’s market by market performance may exceed the other regions, gains have been softening since the beginning of 2014 and this is leading to softening gains at the national level, the firm says. Three Florida markets that rank among the top performers boast high levels of distressed and short sales. All three markets have distressed saturation rates that are at least 10% higher than the national level, at 16.5%, suggesting growth is dependent on a higher propensity of distressed inventory in this area. The report also points out that the stigma once associated with REOs has turned around and today, REOs and short sales signal opportunity to investors and traditional home buyers alike, and an indication that market level gains could be ahead. ‘While spring brings renewed confidence and demand, the numbers through April are mixed. Sales may be up, but subsiding gains imply the recovery is at a critical inflection point,’ said Alex Villacorta, vice president of research and analytics at Clear Capital. ‘As the market normalises, which is a good thing for housing overall, small losses could have greater impact, forcing a standstill or even worse, a return to negative territory in certain areas across the country,’ he explained. ‘Confidence is down in April, suggesting consumers aren’t quite convinced that the economy, much less housing, is as rosy as some early spring metrics suggest. Yet, we continue to see blooms of opportunity as distressed properties continue to provide fertile ground for investors of all sizes to take advantage of a red hot rental market. As we saw back in early 2013, this type of inventory can be the catalyst that revives confidence and re-engagement,’ he added. ‘The early spring numbers are encouraging but rest assured, the overall market is far from being back to normal. There is reason to be hopeful, but arm yourself with accurate data and remember to read headline numbers with the right perspective,’ he concluded. Taylor Scott International
Taylor Scott International, Taylor Scott
