What a difference three years can make. Pro Teck Valuation Services [1] has released a new Home Value Forecast, tracking housing market data between October 2014 and October 2017. During that period, many housing markets across the nation surged from “weak” to “hot.” That’s good news, but what is driving the change?
Pro Teck’s Home Value Forecast [2] analyzes market trends and historical data for the top 200 core-based statistical areas (CBSAs) in the United States and then tracks their recovery from “weak” to “hot.” (The other Market Condition Ratings include “soft,” “normal,” “good,” and “strong,” respectively.) Looking at the data from October 2014 through October 2017, that period saw the number of “hot” markets jump from only 7 all the way to 78. The number of “strong” markets also increased dramatically, going from 38 to 62.
In October 2014, 22.5 percent of the CBSAs tracked by Pro Teck’s Home Value Forecast had a rating of “strong” or “hot.” Three years later in October 2017, that number had increased to 70 percent. In that same time frame, the number of CBSAs with a “soft” or “weak” rating drop from 39 percent to 10.5 percent.
Tom O'Grady, CEO of Pro Teck Valuation Service, said, “Limited inventory and a backlog in construction has left a void in available housing stock, leading to a strong real estate market filled with competitive buyers, increased prices and many same-day sales."
Pro Teck’s analysis credits changes in foreclosure sales as a primary driving factor in this recovery. “During the recovery, metros with larger proportions of foreclosure sales as a percent of market sales saw a muted recovery,” says Pro Teck’s Home Value Forecast report. “Nowhere was this more evident than in Florida.” Between 2014 and 2017 helped spike three different Florida CBSAs from “weak” to “strong”: Deltona-Daytona Beach-Ormond, Florida, Orlando-Kissimmee-Sanford, Florida, and Palm Bay-Melbourne-Titusville, Florida. In each of these CBSAs, the foreclosure sales as a percentage of market sales dropped from the 30 percent range to between five and seven percent between 2014 and 2017.
You can read Pro Teck’s entire Home Value Forecast by clicking here [3].