TRUCKEE, CA-Las Vegas has played some good hands in the home price recovery game, according to a report from Clear Capital, a premium provider of data and solutions for real estate asset valuation and collateral risk assessment. Last week the company released its Home Data Index (HDI) Market Report with data through May 2013. Using a broad array of public and proprietary data sources, the HDI Market Report publishes the most granular home data and analysis earlier than nearly any other index provider in the industry.

May 2013 highlights include:

-- Spring buying activity started to take marginal effect on short-term
price trends as quarterly, national and regional gains saw a slight
uptick over April. The West, South, Northeast and Midwest saw quarterly
gains of 2.4%, 1.1%, 0.8% and 0.7%, respectively.
-- Nationally, home prices saw a 1.3% quarterly gain, while yearly gains
expanded to 8.2%. The yearly growth rate picked up a full 1.0 point over
April's rate of 7.2% growth. As noted in past reports, these noteworthy
gains on the yearly metric can't completely be attributed to current
momentum; rather they are, in part, a result of the low price floor seen
one year ago.
-- Price trends remained mixed at the metro level, a reminder that price
trends at the national and regional levels can tell a very different
story. May's new metro recovery leader, Las Vegas, also highlights the
importance of long-term perspective when analyzing quarterly and yearly
trends in markets that were hard hit during the housing crisis.
-- Las Vegas yearly gains ramped up to 27.0%, surpassing the yearly gains
of 25.7% in Phoenix. This is the first time since April 2012 that
Phoenix has not led the top 50 major metro markets in yearly gains.
While Las Vegas yearly gains continue to pick up steam, the market has a
long road ahead. Current prices remain 57.1% below the peak and would
need to climb another staggering 133.3% to reach peak values. It would
take Las Vegas home prices nearly four years at the current annual
growth rate of 27.0% to get back to 2006 levels. While this is
unrealistic over the short or even mid-term horizon, it puts the current
gains into context.
-- Phoenix on the other hand, has seen a slight moderating pattern over the
last several months, a healthy move for a market that has been very hot
over the last year. This market also has a long road ahead, with prices
still 45.9% below their peak.
-- Further evidence of spring's slightly positive impact: Severity of
quarterly declines in the lowest performing markets subsided slightly in
May, where only six out of 15 of the lowest performing markets saw
declines and five of those saw less than 1.0% in losses.
-- Cleveland was the exception, where quarterly losses of 4.3% fueled
yearly declines of 4.0%. This market's low price point of less than $75
PPSF and high REO saturation rate of 39.1% continue to drive volatile
trends.

“May home price trends confirm the recovery continues to mature,” said Alex Villacorta, vice president of research and analytics at Clear Capital. “While there's no questioning the validity of the recovery at this point, performances at the local level remained mixed when considering strength, sustainability and relative positions to 2006 prices. For example, Las Vegas' strong yearly gains represent a rebound from a severe correction rather than bubble-like price growth.

“Despite 27% yearly growth, this market remains 53.% below peak levels, significantly more depressed than most markets. Even if Las Vegas could parlay 27% annual growth, a highly unlikely outcome, it would take nearly four years for home prices to climb back up to high-rolling 2006 levels. On the other hand, some markets like Cleveland have yet to find a foothold in the recovery. Both Las Vegas and Cleveland are great reminders that granularity in home price trends remains key.
“In general, national price trends are at a relatively healthy point and the diversity in price performance at the local level is mainly a function of the severity to which a particular housing market was hit during the housing crash.”

Instant Insights /

Home Price Trends Show Las Vegas Taking the Lead in Recovery

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