The August update for the Pro Teck Valuation Services' Home Value Forecast (HVF) showed that the U.S. housing market with the highest year-over-year price change in July was Detroit – but at the same time, the authors of the report believe that more than one indicator must be used to evaluate the housing market's health.
According to the August HVF update, Detroit led all U.S. housing markets in year-over-year sold price with 28 percent. When considering other indicators, however, Detroit is not as strong a market as it would appear based on the spike in sold price. The Collateral Analytics forecast for the top U.S. housing markets rated San Francisco as "strong" largely because its home prices are at an all-time high. However, that same forecast rated Detroit as a "soft" market mainly due to home prices in that market trying to return to pre-crisis levels.
"While Detroit has seen healthy gains this year, the Home Value Forecast rating system shows that Detroit is still a soft market," said Tom O'Grady, CEO of Pro Teck Valuation Services. "Although examining one indicator is helpful, it's important to analyze several home price indicators to best understand the health of a real estate market."
Similar to Detroit, Port St. Lucie, Florida, has seen significant gains in the housing market in the last year. However, home prices in Port St. Lucie are selling 30 percent below previous highs and foreclosure sales are still more than three times their post-crash levels, which earned the market a "soft" condition rating in the August HVF update, according to Pro Teck.
"Although examining one indicator is helpful, it's important to analyze several home price indicators to best understand the health of a real estate market." —Tom O'Grady, CEO of Pro Teck Valuation Services.
The August update to the HVF includes a list of the 10 best and worst performing metro areas ranked by market condition for July. The indicators used in the rankings include sales/listing activity and prices, months of remaining inventory, days on market, sold-to-list price ratio, and foreclosure percentage and REO activity.
The best performing single-family housing markets for July were:
- Bellingham, Washington
- Cheyenne, Wyoming
- Mt. Vernon-Anacortes, Washington
- Olympia-Tumwater, Washington
- Sacramento-Roseville-Arden-Arcade, California
- San Antonio-New Braunfels, Texas
- San Jose-Sunnyvale-Santa Clara, California
- Santa Rosa, California
- Seattle-Bellevue-Everett, Washington
- Stockton, California
"The West Coast continues to dominate the top ten markets, with the exception of San Antonio," O'Grady said. "Also, looking at our top three for the month using Collateral Analytics Forecast, we see Bellingham, Cheyenne, and Mt. Vernon at or near all-time highs with forecasted continuing appreciation."
The worst performing markets were:
- Huntsville, Alabama
- Syracuse, New York
- Scranton-Wilkes Barre-Hazleton, Pennsylvania
- McAllen-Edinburg-Mission, Texas
- Atlantic City-Hammonton, New Jersey
- Baltimore-Columbia-Towson, Maryland
- Hagerstown-Martinsburg, Maryland-West Virginia
- Jacksonville, Florida
- Jacksonville, North Carolina
- Rockford, Illinois