According to ""CoreLogic's"":http://www.corelogic.com/ most recent MarketPulse release, the strongest real estate markets in the country right now have one thing in common: Black gold.[IMAGE]
The company released its September issue of MarketPulse Thursday, revealing interesting findings from its Real Estate Strength Index (RESi).
The index takes a variety of factors-including real estate health, economic health, and mortgage finance risk-and combines them using a weighted blend to determine the RESi for each market. Each state and market is then ranked according to RESi, which can range from 0-100.
RESi scores typically run the gamut from the low 20s (weak area) to the high 70s (strong), with 50 being the average.
Based on an analysis of RESi state rankings, advances in oil and gas extraction seem to have provided a substantial boost to states with an abundance of the natural resources. The creation of an infrastructure to support the oil boom is leading to job growth in those areas, CoreLogic reported.
The state benefiting most from the boom is North Dakota, the strongest state in the nation with a RESi score of 71. It is followed by South Dakota (62), while the neighboring states of Wyoming and Nebraska both fall in the 55-60 range.
While those states benefit from their own oil and shale fields, even neighboring non-oil producing states are feeling the spillover effects. As a result, most of the country's middle states enjoy RESi scores of 50 or higher.
In other RESi news, CoreLogic found that the majority of the most improved markets in the country are located in western states, many of which peaked and bottomed earlier than the southern and eastern states.
San Jose-Sunnyvale-Santa Clara, California, is the strongest market on the list (ranked number one with a RESi of 52.84) and the fifth most improved. However, the list of most improved markets also includes relatively weak areas: Bakersfield-Delano, California, is the 10th most improved market, but ranks 98th in terms of overall RESi (with a score of 37.84).
""The presence of a mix of markets indicates strength from a relative and historical perspective,"" CoreLogic senior economist Katie Dobbyn wrote. ""Further, there are a diverse set of economic factors driving the growth, suggesting broad economic improvement.""
While the West held many of the most improved markets, the Northeast saw many markets showing little improvement at all. CoreLogic attributed the slow improvement to the Northeast's tendency toward judicial foreclosure.
""As noted in prior editions of MarketPulse, judicial foreclosure states are prone to foreclosure congestion, which can delay improvement and hold back growth,"" Dobbyn wrote.