Friday , 2 June 2017
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Summer Sales Slow as 2016 Heads for ‘Moderation”

The first analysis of June market data confirms forecasts that sales peaked in the first half of the year and will hold on to make 2016 a moderating, normalizing housing market like those preceding boom, at the turn of the Millennium.

Clear Capital forecasted between sales growth at 1% to 3% in January and is sticking a with the same forecast, which was more modest than others at the time, notably NAR and Fannie Mae.  Both have lowered their sales forecasts as the months passed.  Clear Capital is calling for year-end national growth of 2.6%.

At the national level, tapering gains are a sign that while declining markets through the spring buying season are projected to continue through the summer buying season—all of which is cause for concern. Both San Jose and San Francisco are expected to go negative through the end of the year, confirmation that micro-market analysis is critical lest you miss key trends.

Clear Capital’s forecasts consider many housing-specific and economic inputs. It’s the only housing index that, at any given time, can generate sub-ZIP code home price trends with a one- and two-year forecast.

Regionally, the West continues to dominate quarterly growth as it hovers around a 1.1% quarter-over-quarter price increase, a downtick of 0.1% from last month. Growth rates in the South remain unchanged at 0.7% QoQ growth, while Northeast and Midwest regional growth continues to lag far behind the rest of the nation at 0.1% QoQ growth each, a virtual standstill regarding price growth. Nationally, quarterly market performance remains fixed at 0.6% with no change from last month.


The Seattle and Tampa MSAs are tied for the top spot on our Highest Performing Major Metro Markets for June, each reporting an impressive QoQ price increase of 2.0%. Tampa is not the only MSA from the Sunshine State to have made the list, as three other Florida markets are also reporting impressive quarterly gains. Quarterly price growth in Orlando is up 0.2% since last month to 1.7%, while Jacksonville QoQ price growth is currently at 1.7%, a gain of 0.3% since last month. Miami is also reporting 1.4% quarterly price growth.

The most recent quarterly growth figures for these Floridian markets fit into a longer term pattern of growth and recovery for the state. Each of these major MSAs has experienced incredible gains since the market lows of 2011, recovering at least 30% or more of the individual market value. Jacksonville and Orlando home prices have increased 33% and 44% respectively, while Tampa and Miami home prices have skyrocketed by almost 56% and 57% over the time period respectively.

An interesting phenomenon that may be contributing to the stellar price growth in the region is the relative increase in baby boomers in these four Florida metros. The most recent data from the U.S. Census Bureau indicates that this segment of the market — homeowners aged 55 to 74 — has increased more than 2.5x the overall population of homeowners in each of the top four Florida markets since 2011. In Miami and Jacksonville, the increase in homeowners of this generation is more than 500% greater than the overall increase in the total population of homeowners. It’s evident that the baby boomer demand for housing in the region is a significant contributing factor in the market’s overall success. In Orlando, the trend is quite similar to the ratio of baby boomer homeownership growth to overall homeownership growth is over 400%.

“Florida has traditionally been regarded as prime real estate by those retirees who may be looking to migrate from colder areas of the nation such as the Northeast to a warmer and sunnier alternative for their golden years. As the top Floridian housing markets continue to grow and return impressive price gains — Tampa is currently reporting 12.2% annual price growth — it’s no surprise that this generation continues to invest in real estate in the region. The baby boomer share of homeowners is clearly on the rise here, and as more and more of this generation nears retirement age, Florida markets may be in for a boost in performance if tradition continues and retirees demand homes in the region,” states Alex Villacorta , Ph.D., vice president of research and analytics at Clear Capital.

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