Cromford Report on National Real Estate Market I just received this interesting bit of data that I wanted to share with you. I received this from our Western Ops and it shows a rather rapid recovery prospect in the real estate markets of the West. This data comes from the Cromford Report which is a factual analysis of the current market. IN SUMMARY: S&P consistent with Cromford $/SF data from ARMLS (must allow for time delay). Phoenix still sits further below the bubble peak than most of the country. The 20-city composite currently would have to increase 29% to regain its maximum. Las Vegas has the furthest to climb with a 100% jump required. Miami (68%) and Tampa (61%) are in a similar position to Phoenix. Dallas and Denver have both regained and surpassed their previous peaks and are setting all time price records now. However both are non-volatile markets. Denver is 43% above its January 2000 point while Dallas is up by only 30% in the last 13 years. In terms of annual increases the info is below: 1. Las Vegas +24.9% 2. San Francisco +24.5% 3. Los Angeles +19.9% 4. Phoenix +19.8% 5. San Diego +19.3% 6. Atlanta +19.0% 7. Detroit +16.4% 8. Miami +14.8% 9. Portland +11.8% 10. Seattle +11.8% 11. Minneapolis -11.5% 12. Tampa +11.1% 13. Denver +9.4% 14. Dallas +8.0% 15. Charlotte +7.8% 16. Chicago +7.3% 17. Boston +6.7% 18. Washington DC +5.7% 19. Cleveland +3.5% 20. New York +3.3% It is clear that the market is much stronger in the West than in the Northeast. However, even for New York, home prices are increasing faster than inflation. Another trend that jumps out at you when looking at the long term chart is the sudden acceleration of price increases on the west coast and in Atlanta & Chicago. Between the reading for Dec-Feb and the current reading for Apr-Jun, a period of just 4 months, the index has increased as follows: 1. San Francisco +16.7% 2. Atlanta +12.5% 3. San Diego +12.4% 4. Las Vegas +11.2% 5. Los Angeles +11.0% 6. Seattle +11.0% 7. Chicago +10.0% 8. Portland +9.2% 9. Miami +8.5% 10. Tampa +8.3% 11. Detroit +8.1% 12. Dallas +7.5% 13. Washington DC +7.3% 14. Phoenix +7.2% 15. Denver +7.1% 16. Boston +7.1% 17. Charlotte +6.6% 18. Minneapolis +6.4% 19. Cleveland +5.9% 20. New York +4.2% Note that Phoenix has only increased by 7.2% over the four recent months (consistent with its annual trend of +19.8%), but this places PHX in a lowly 14th place and below the overall 20-city average of 8.8%. The rate of increase for the top 7 cities in the same time period is staggering, representing annualized rates of over 30% and over 50% in the case of San Francisco. The 20-city increase of 8.8% is the highest four-month increase EVER posted for this index since it was first reported in January 2000. The maximum 4-month increase during the bubble was 7.7% in June and July 2004. The 10-city index increased by 8.90% over the last 4 months and this also sets a new record since January 1987 when the 10-city index was first published. By a whisker it breaks the previous record of 8.88% set in June 2004. Yet we still hear talk of a slow recovery. It doesnt get any faster than this, folks. In the past 4 months the Case-Shiller 10-city and 20-city indexes have risen faster than at any time in living memory. Some cities were rising even faster in 2012 but the composite indexes were dragged down by other cities that were still declining at that point. For the record, the fastest decline was at a slightly more extreme rate of -9.5% over 4 months reported in January and February 2009. The press release issued with the report mentions the pace of price increases is moderating. However this moderation is actually fairly slight and represents a change in pace from insane to merely ridiculous. The mass-obsession with interest rates and the Fed has caused the press release to downplay the actual numbers being reported and focus instead on what might happen over the next few months. It is indeed possible, even likely, that price increases may slow and the market quieted down. Good stuff!
Posted on: Fri, 25 Oct 2013 16:58:07 +0000
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