Things change. And they always will. Period. What was hot at one time may be cool at another. And Vice-versa. That encompasses from coffee to iced tea to real estate markets.
From a residential real estate perspective, the relative performance of a local market is a function of current supply and demand relationships and expectations of changes in the future. From a ranking perspective, relative performance could be related to prices, sales volumes, inventories or even metrics such as sales price to listings, months inventory or days on the market.
Each month RealtyTrac reports sales and foreclosure statistics for metros having a population of 500,000 or greater (provided there are adequate sales data available). Included in their monthly report are median home prices and year-over-year changes for these metro markets. RealtyTrac’s definition of a hot market is predicated on the fastest accelerating appreciation rate year-over-year of the change in median home price. This is calculated by taking the latest 12-month percentage change in median home values as of November 2014 and subtracting the 12-month change as of November 2013.
So what were the hottest residential real estate markets as of the end of November 2014 (the latest available data) under RealtyTrac’s metric? In addition to the data RealtyTrac provided, included also are the corresponding job growth rates for the 2013 and 2014 time periods. Interesting to observe that every one of the top-10 markets had positive job growth in the past 12-months.
If the 12-month percentage change in median price had been the determining criterion, the top performers would have been Detroit, Michigan (median price up 32 percent in the past 12-months), Toledo, Ohio (up 23 percent), Dayton, Ohio (up 20 percent). Modesto, California and Lakeland, Florida (+18 percent each).
Other information in the report included:
- Las Vegas-Paradise, Nevada saw the percent of distressed and short sales rise from 33.7 percent of all closing in November 2013 to 36.3 percent in November 2014 – this market had the greatest percent of all for distressed and short sales as of November 2014
- Home price appreciation in the latest 12 months averaged 6 percent in these 500,000 and up population metros
- November 2014 median home sales price (both distressed and non-distressed properties) was up 35 percent from the trough of $141,000 in March 2012 but remains 20 percent less than the peak of $237,537 notched in August 2006
- Distressed home prices increased at a quicker rate than non-distressed properties in the past 12 months, rising 18 percent versus 14 percent, respectively
- The percent of houses sold for less than $200,000 decreased in the past 12 months while those priced $200,000 and up grew as a percentage of sales
- The largest increase in the percent of homes sold was in $500,000 to $1 million range – up 20 percent. Homes costing $1 million and up increased 15 percent year-over-year
To read the full press release from RealtyTrac click http://www.realtytrac.com/news/home-prices-and-sales/realtytracs-november-2014-residential-and-foreclosure-sales-report/
This is yet another arrow in the quiver of an improving housing market, on average, nationwide.
All considered, the U.S. housing market continue positive heading into 2015.
Ted