HousingIQ: Q3 2019 Housing Market Vitality Highlights

Housing market vitality softening.
Thirty-five metro markets forecasted to deteriorate.
Twelve states forecasted to outperform national market.

The US Housing Market Vitality Indicator (HMVI-US) closed Q3 2019 at 105.9 suggesting economic conditions support 5.9% annual house price gains. The 0.15 point year-over-year decrease wiped out all improvements since last spring. At the state level, twelve state housing markets are stronger than the overall US housing market. At the metro level, Q3 2019 ended with house price changes in 114 metro markets forecasted to outperform the national market. On a cautionary note, in thirty-five metro markets house prices are forecasted to decline.

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California Housing Market Vitality – August 2019

Eight metro housing markets forecasted to outperform national market
Fourteen markets forecasted to underperform national market

The recently released California Association of Realtors (CAR) 2020 Housing Market Forecast projects a 4.1% increase in California median home prices in 2019 and a 2.5% increase in 2020.  Such aggregate data from economists who have their ears closest to the ground is extremely valuable.  HousingIQ adds actionable details to the headline.

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HousingIQ: August 2019 Housing Market Vitality Highlights

Housing market vitality softening.
Sharp increase in number of markets with forecasted price declines.
Over a quarter of markets forecasted to outperform.

The US Housing Market Vitality Indicator (HMVI-US) decreased by 0.4 point to end August 2019 at 105.6. The 0.3 point three-month decrease and 0.3 point year-over-year decrease indicate a sustained softening in house price trends. Market strength continues to be widespread with local economic conditions exerting a positive impact in 90% of the 402 metro housing markets tracked by HousingIQ. August 2019 ended with house price changes in over 100 metro markets forecasted to outperform the national market. On a cautionary note, the number of markets with forecasted price decreases increased sharply to over 10%.

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10 housing markets for single family rental investors

The local population is better educated. They work in the knowledge economy. They make a good living. And they need a place to call home. Hiccups, cooling-offs, moderations, … notwithstanding, houses have become increasingly unaffordable in these markets. Which presents single family rental (SFR) investors an opportunity for income and long-term appreciation.

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HousingIQ: July 2019 Housing Market Vitality Highlights

Housing market vitality stable.
Economic conditions support recent trends.
Prices forecasted to deteriorate in 4% of markets.

The US Housing Market Vitality Indicator (HMVI-US) decreased by 0.25 point to end July 2019 at 105.8. The negligible 0.09 point three-month decrease and 0.10 point year-over-year decrease indicate house price trends will sustain in the short term. Market strength continues to be widespread with local economic conditions exerting a positive impact on 386 out of the 402 metro housing markets (96%) tracked by HousingIQ. July 2019 ended with house price changes in 133 metro markets (33%) forecasted to outperform the national market.

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Sharpening residential mortgage default assessment

Pop quiz.  Two different parts of the country.  Two houses.  Two mortgages.  Same credit score.  Identical LTV.   Which loan has a higher likelihood of defaulting?  The answer, unsurprisingly, is:  ‘It depends’.  It depends on the local economic conditions.  It depends on how house prices move in those areas.  The area where house prices decline more will have a higher likelihood of the loan defaulting.  The loan in the area with more jobs, better wages, and higher growth prospects is less likely to default.

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HousingIQ: Q2 2019 Housing Market Vitality Highlights

Housing market vitality at eight-year high.
Economic conditions support over 6% increase in house prices.
Steady uptick in number of markets with decreasing prices.

The US Housing Market Vitality Indicator (HMVI-US) closed Q2 2019 at an eight-year high reading of 106.6. The 0.32 point year-over-year increase and 0.39 point quarterly increase indicate prevailing house price trends will continue in the short term. Market strength was widespread with local economic conditions exerting a positive impact on 373 out of the 402 metro housing markets (93%) tracked by HousingIQ. Q2 2019 ended with house price changes in 131 metro markets (33%) forecasted to outperform the national market.

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(Z)estimating future house values

Zestimate just got a makeover – it’s smarter and sees better.  Incorporating ideas from the Zillow Prize, it’s now more accurate and “half of all Zestimates fall within 2% of the home’s eventual sale price.” That accuracy comes with a caveat. It is for Zestimates of for-sale properties.  For homes that are not listed for sale, the error is 7.7%.  Nevertheless, for home buyers, Zestimates give a good, usable idea of current house values.

But what about future house values?  The Zestimate forecast predicts the change in the Zestimate over the next 12 months based on past Zestimate values and the Zillow Home Value Forecast.  The Zillow Home Value Forecast forecasts the change in the Zillow Home Value Index (ZHVI) over the next 12 months.  And all this boils down to: improved forecasts of the Zillow Home Value Index power better (Z)estimates of future house values. 

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