Winter continues to slow growth in housing price appreciation across the nation, but distressed saturation levels – the percentage of real estate owned and short sales to all sales – could point to a strong market return come spring.

Across the nation, regions continue to wane in quarter-over-quarter (QoQ) growth in home prices during the slow winter real estate season. Since last month, the West has downtick 0.1% to 0.9% quarter-over-quarter, though still the highest regional growth figure in the nation, while the Northeast and Midwest have each fallen 0.2% to 0.3% QoQ growth. The downward trend continues nationally, as well, with the national quarter-over-quarter growth rate falling 0.1% to 0.6% during the lows of winter. The South appears to be the only region in the nation that has not lost ground in the last month, as it holds steady at relatively decent 0.6% quarterly gains.

On the MSA market level, several markets are reporting increasing QoQ growth in home prices since last month, an uncharacteristic upward move during the winter season. Nashville, TN is up 0.3% since last month to 1.3% QoQ growth, while Seattle, WA has increased 0.2% to 1.6% quarterly price change, tied with Providence, RI for the top spot on the performing market chart.

It’s been a hard winter for Boston, MA, which is reporting the lowest QoQ growth in home prices of any major metro area at -1.9% quarterly price change. While the bottom performing markets do not appear to be dominated by any single region, western presence is noticeably lacking. Apart from Honolulu, HI, which is reporting positive 0.3% QoQ growth, there are no MSAs from the West in this month’s lowest performing markets, a sign that the region is proving to be more resilient to the troughs of winter growth.

There are signs that this spring is shaping up to be a healthier one than spring of 2015 when considering the overall levels of distressed saturation across the nation’s largest markets. For 80% of the nation’s top 50 markets, the percentage of distressed properties on the market is down from March 2015, with Tampa and Orlando having the best improvements—down 7.8% and 10.4% respectively.  Most markets are down between 1-4%, and only three markets, Baltimore, Hartford, and Rochester, have higher distressed saturation levels at an increase of 2.0% or more, as shown in Graph 1 below.

“As winter continues to slow quarterly growth across most areas of the nation, there are several MSAs that are showing resistance to the usually lethargic season. This is a good sign that the current economic and financial market instabilities are not greatly affecting all corners of the real estate industry, yet shows that there is still volatility in the market across various factors. At the end of the day, however, the decline in the number of distressed properties from March 2015 to March 2016 is promising. As the legacy of the housing crash continues to subside, markets become healthier and more stable in the long run.

Conversely, lower levels of distressed saturation will also mean fewer opportunities for investment buyers, potentially leading to lower demand in certain areas of these markets. As the slow season thaws and the spring kickstart of the real estate season nears, we’ll get a better idea of how consumer confidence and economic uncertainty, along with the distressed saturation levels, will ultimately affect the nation’s housing industry,” said Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.