Hyper-local Weiss Indexes Show Nearly Half of Homes in Top Markets are Losing Value

Jul 22, 2015, 07:00 ET from Weiss Residential Research LLC

NATICK, Mass., July 22, 2015 /PRNewswire/ -- Despite market reports of strong median home price appreciation this spring, gains are very uneven and nearly half of homes in ten of the nation's largest markets actually lost value in May. On a house-by-house basis, about one-third fewer homes in the largest markets gained value during the heart of the spring buying season this year compared to last, according to Weiss Residential Research's Indexes.  

Only 54 percent of homes in the markets appreciated during May compared to 81 percent in May 2014, a sign that the downward trend may continue in the coming months.  In Denver, the hottest market in the nation, 84 percent of houses appreciated in May compared to 95 percent last year.  In the Washington, DC market, weakest of the top ten, only 34 percent of houses gained value in May compared to 57 percent in May 2014.

"Don't be fooled by averages," said Allan Weiss, founder and CEO of Weiss Residential Research.  'All of the largest metro indexes are rising more slowly than they were a year ago though market reports give the impression that values are rising across the board.  However people don't own the entire market, they own one house."

Larger homes are having a harder time than smaller homes with two bedrooms or less.  In Denver, larger homes appreciated 5.8 percent on a year over year basis in May compared to smaller homes.  In Washington, DC, larger homes actually fell -0.7 percent.  Smaller homes declined less, -0.2 percent year over year.

Same Pattern as the Housing Crash

In a metro like DC with a median price increase of 1.2 percent in the past year according to Case-Shiller, 60 percent of the houses are rising and the other 40 percent are stagnant or falling.  Since the ones that are appreciating outnumber the ones falling the average is a low positive number, Weiss said.

"The same pattern occurred before the great housing meltdown ten years ago.  The percent of houses rising in DC declined from 100 percent to 60 percent while the metro index showed a slowdown but did not go negative.  Once the population of houses that had been rising fell below 50 percent, the index began its descent," Weiss said.

Ten Top Markets, May Data


Percent of Houses Rising

Median 1 Year Value Change


Now

One Year Ago

Metro Area

Rank

% Rising

Rank

% Rising

Small Houses

Medium Houses

Large Houses

Denver

1

84%

2

95%

9.0%

7.2%

5.8%

San Francisco

2

65%

1

97%

4.8%

4.0%

3.5%

Seattle

3

62%

5

87%

1.7%

1.7%

1.7%

Miami

4

59%

4

90%

4.0%

3.7%

2.0%

Atlanta

5

57%

6

84%

3.9%

3.6%

3.2%

Chicago

6

48%

8

65%

2.8%

2.6%

1.8%

Phoenix

7

47%

7

79%

2.1%

1.2%

0.1%

Los Angeles

8

46%

3

94%

1.3%

1.0%

0.4%

New York

9

40%

9

58%

0.2%

0.3%

0.0%

Washington, DC

10

34%

10

57%

-0.2%

-0.4%

-0.7%

"Today, conditions at the local level may not be as positive as national reports indicate. Every house is unique, has a unique value and responds differently to market changes.  In today's market, sellers should price their homes very carefully and research local conditions to avoid overpricing that could lead to an extended time on market in case prices do decline.  In this climate, buyers and investors should be careful to avoid buying a home that is on the verge of losing value," said Weiss.

Weiss Residential Research tracks value trends at the individual house level for 5500 Zip codes and 100 metro markets.  These indexes are depicted in Weiss Maps by displaying houses as color coded dots with appreciating houses in shades of green and depreciating houses in shades of red.  Like weather maps of local markets, these maps are dynamic and show each recent month in succession bringing the market to life. Weiss Maps give consumers and investors a more accurate picture of local market conditions than maps based on median prices in entire Zip codes or CBSAs.

Allan Weiss urges consumers seeking information about their homes and neighborhoods to see for themselves how values have changed in recent months and how they are expected to change over the next 12 months by accessing the Trend Tracking Tool at Owners.com at http://www.owners.com/  or Weiss  Maps at http://www.weissindex.com/.

SOURCE Weiss Residential Research LLC



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