National Home Prices Down 5%, Local Pockets See Gains: Clear Capital
By: Carrie Bay
Home prices continue to plunge across much of the United States, according to Clear Capital, but the company says it’s seeing varying trends at the micro-market level which give credence to the old adage that real estate is local.
Clear Capital’s home price report released Tuesday shows that residential property values at the national level are down 5 percent for the three months ending in October when compared to the previous three-month period.
Several local markets in the eastern part of the country, though, are bucking the national trend and posting more quarterly gains. In particular, Clear Capital points to Washington, D.C., where home prices are up 2 percent on a quarter-over-quarter basis; New York City, which posted a quarterly increase of 1.6 percent; and Bridgeport, Connecticut with a 1.5 percent rise in home prices for the rolling quarter.
“Although nationally, price trends are showing significant decreases, it is critical for policy makers, investors, and other users of home price data to understand that price dynamics at local levels differ significantly from the macro trends,” said Dr. Alex Villacorta, senior statistician for Clear Capital.
For example, Villacorta says, all six major metropolitan areas in California are out-performing both national and West region numbers in terms of yearly gains. On the other hand, four of the top markets in Florida are already very near double-dip territory, even though national prices remain nearly eight percent above the 2009 trough.
“[W]hile national home price trends gauge overall home price movement, regional, metro, and local housing markets will continue to respond differently to distressed inventories and national policy,” Villacorta said.
Clear Capital took a granular look at the Washington, D.C. metro in its study to illustrate the “locality” of real estate price trends. The District posted a 2 percent quarterly increase in home prices and 6.7 percent yearly gain in Clear Capital’s latest survey.
Over the past three years, the company says Washington, D.C. has tracked closely with the national home pricing trend, matching the price troughs in early 2008 and 2009. However, history doesn’t necessarily guarantee similar direction or timing going forward. The District has posted quarterly price increases for two additional months beyond recent gains recorded at the national level, at which prices have now begun to fall.
For additional local perspective of the Washington, D.C. market, Clear Capital turned to its on-the-ground national network of real estate professionals.
“The greater Washington, D.C. market might be doing better than the rest of the country because of its proximity of the federal government, and the solid job base for companies doing business for the government,” said Ben Puchalski, a real estate sales agent from Washington, D.C. “The tax credit definitely eliminated some of the inventory problems in D.C., but we’ve seen a slow down since it ended.”
Looking closer at national quarterly pricing trends, 18 states have declines higher than five percent, while 29 states experienced quarterly price changes that outperformed the national mark. Clear Capital says this is significant because even though a majority of the states outperform the nation, declines in those 18 states are so severe that it brings the overall market average down.
Although nationally, home prices remain 7.7 percent above double dip territory – defined as prices dropping below their record lows experienced at the worst of the housing market crash – six local markets are presently experiencing a double dip, according to Clear Capital’s report.
Atlanta, Georgia; Birmingham, Alabama; Portland, Oregon; Seattle, Washington; Tucson, Arizona; and Virginia Beach, Virginia have all recently broken through for new home price lows, the company’s data shows.
But Clear Capital says those markets aren’t the only ones suffering. Fourteen additional markets are within five percent of double dip lows, and another seven are within 10 percent of new lows.
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