Move over Miami, there’s a new leader in the U.S. property market recovery. That’s according to data provided by Clear Capital, which reports that Las Vegas is now the national leader in increasing market value with a 31.2% annual improvement at the end of the last quarter. Experts point out that a lower price point for the average home is helping to drive growth in Sin City, however, and that the performance will not hold over the long term. Even so, even moderate performance following such sharp gains will still lead to improvement for the metro and the country as the market continues to recover. For more on this continue reading the following article from Property Wire.
National residential property prices in the United States have increased by 9.3% over the last year and 1.6% over the last quarter, according to the latest index to be published.
The figures from real estate data provider Clear Capital show that Las Vegas is currently leading the property recovery but nationwide home prices remain 33.4% below peak values.
Regional yearly gains were led by the West, up 17.8%, while the Northeast trailed with just 4.8% growth. The Midwest and the South saw yearly gains of 7.5% and 7.6%, respectively.
The top 15 performing metro markets have had impressive yearly gains, with average growth of more than 20%. Some 14 metros posted yearly gains above 15%.
Las Vegas yearly gains grew to 31.2%, the first metro to surpass 30% since the start of the recovery. Quarterly gains of 4.3% meant it was the strongest of all the metros and the firm said that it could retain its number one spot over the near term.
However, the report points out that while Las Vegas leads the recovery, its median price of $145,000 ranks it below 35 of the top 50 markets. This suggests low price points are in part driving Las Vegas’ gains.
Conversely, San Jose has seen gains of 26% over the year, despite its high median price of $710,000, an indication that demand is fuelled by a strong local economy. As such, these two markets will likely see a variance in their trends moving forward, the report says.
The lowest performing metros saw only two out of 15 post quarterly losses, with prices declining less than 1% for each. Average yearly gains for the group rest at 3%, evidence that the more active spring and summer buying season have helped buoy most major markets’ home prices.
Detroit home prices have risen 9.6% over the last year and while the metro remains on the lowest performing list, its quarterly gains of 1% are the highest for the group. The report says that these gains are particularly impressive against the backdrop of an REO saturation rate of 42%, more than 27% higher than the national average.
‘While July home prices continue to ramp up throughout the country led by Las Vegas posting more than 30% yearly growth, let's not forget a healthy recovery means moderation as the new normal takes hold,’ said Alex Villacorta, vice president of research and analytics at Clear Capital.
‘Over the last half of 2013, we continue to call for a moderation in home price trends. A rising price floor will dampen some potential homebuyers' appetites, particularly as recent gains bring many markets back into pre-bubble equilibrium. In other words, home buyers are starting to adjust to the new normal, where steep discounts from the peak are not as attractive as they once were. Having said that, if housing inventory continues rising, it should help alleviate some of the recent pressure on prices, as well as homebuyer' confidence in the market's health overall,’ he pointed out.
‘After these shifting fundamental drivers shake out, we expect the recovery to continue at a healthier and more sustainable pace. Certainly Las Vegas is the strongest example of a market that is really hot, with yearly growth of 31.2%. While these gains are a nice pick-up off the price floor, they will not last over the long term,’ he explained.
‘We expect most of the major markets across the country to follow the path of sharp upward corrections in the short term, followed by moderating gains as markets fall back in line with their long run levels. Phoenix, for example, is now seeing quarterly growth that supports a yearly growth rate more in line with 10%, as opposed to the current yearly gains of 23.3%. The exact timing of this moderation will vary market by market,’ he added.
He concluded that overall the housing market overall is in a great position and likely to continue to improve.
This article was republished with permission from Property Wire.