Pro Teck and Collateral Analytics Introduce the Home Value Forecast Monthly Market Update

WALTHAM, Mass., Oct. 10, 2011 /PRNewswire/ -- Welcome to the first monthly Home Value Forecast (HVF), where Pro Teck Valuation Services and Collateral Analytics will bring you a unique perspective on the U.S. housing market.  Our goal with the forecast is to highlight the fact that all real estate is local.  Regional trends are great for understanding the big picture, but one needs to understand micro market drivers to make fully informed decisions about specific real estate assets.  

(Logo: http://photos.prnewswire.com/prnh/20091012/NE89718LOGO )

Home Value Forecast Methodology

A Core Based Statistical Area (CBSA) level real estate market ranking system has been developed for the homevalueforecast.com website.  Data used in HVF include local market MLS, public real estate and other economic sources.  

The rankings are run for the single family home markets in the top 200 CBSAs on a monthly basis to highlight the best and worst metros with regard to a number of leading real estate market based indicators.  These include:

• Number of Active Listings
• Average Listing Price
• Number of Sales
• Average Active Market Time
• Average Sold Price
• Number of Foreclosure Sales
• Number of New Listings

The ranking system is purely objective and is based on the directional trend of each series using actual data over the past 8 quarters.  The trends are then defined as being increasing, stable, or decreasing.  Each indicator is given a score based on whether the trend is positive, negative, or neutral for that series. For example, a decline in active listings would be a positive trend. A composite score for each CBSA is calculated by summing the directional scores of each of its indicators.  From the universe of the top 200 CBSAs, we highlight each month the CBSAs which have the highest and lowest composite scores.

U.S. Real Estate Trends

The nationwide real estate market has been receiving its share of bad news in the past several years as home prices have declined significantly leading to very high levels of distressed sales and inventory.  One of the less followed casualties of this difficult environment has been new home construction which is currently running at the lowest levels seen in the past 50 years.  The most recent seasonally adjusted total is down 5.8% from a year ago but little changed from its 2009 values.  This most likely suggests that new home construction has found a bottom in the vicinity of its current depressed levels.

This has also led to a tightening rental market in many parts of the country. The combination of rising rents and declining home prices has led to the rental yields for both single family homes and condominiums being close to record levels.  This is one of the important reasons why astute investors are now taking a serious look at purchasing distressed properties in a number of the hardest hit markets.

CBSA Winners and Losers

The top ranked CBSAs exhibit a consistent theme which is that in nearly all cases prices have declined significantly from their peak 2005-2006 levels and have been moving sideways or slightly downwards for more than two years.  While the first thought might be to assume that these are very depressed markets with little prospect for improvement, the positive trends in our various indicators suggest that buyers are taking advantage of the depressed prices and the corresponding excellent values.  

Conversely, in a number of the lowest ranked CBSAs, prices have held up quite well since the peak.  However, the negative trends in the various market indicators suggest that prices may have further to fall before these markets regain their equilibrium.

The top CBSAs in the current month based upon our ranking system:

1. Cape Coral – Fort Myers, FL
2. North Port/Bradenton/Sarasota, FL
3. Punta Gorda, FL
4. Lakeland, FL
5. Orlando/Kissimmee/Sanford, FL
6. Syracuse, NY
7. Tallahassee, FL
8. Bakersfield/Delano, CA
9. Bend, OR
10. Bethesda/Rockville/Frederick, MD

The bottom 10 CBSAs in the current months:

1. Portland/Vancouver/Hillsboro, OR-WA
2. Racine, WI
3. Reno/Sparks, NV
4. Spokane, WA
5. Toledo, OH
6. Tucson, AZ
7. Vallejo/Fairfield, CA
8. Hickory/Lenoir/Morganton, NC
9. Richmond, VA
10. Olympia, WA

Outliers

All real estate is local, and what's happening at the ZIP level is not always consistent with CBSA trends.  In this regard, our analytic tool enables users to track real estate markets around the U.S. by county, city, ZIP code, or neighborhood as well as by property type, transaction type, price range and property characteristics.

For this month we will look at Bakersfield, CA.

The Bakersfield CBSA and an individual ZIP code within the CBSA, 93314, both had similar prices up until the peak in 2006.  After then, ZIP code 93314 has lost 45.5% of its home value versus 56.8% for the overall metro.

With regard to relative price performance, we have found that the hardest hit markets were those where the buyers during the market peak period were the most heavily leveraged – i.e. had very high loan-to-value ratios (LTVs).  Our data shows that for all of Bakersfield, the average LTV has been well over 90 percent while that for Zip 93314 has been about 85%.  

About HomeValueForecast.com

Homevalueforecast.com was created from a strategic partnership between Pro Teck Valuation Services and Collateral Analytics.  HVF provides insight into the current and future state of the U.S. housing market, and delivers 14 market snapshot graphs from the top 30 CBSAs.

Each month homevalueforecast.com will bring you a monthly briefing along with "Lessons from the Data," an in-depth article based on trends unearthed in the data.

HVF is built using numerous data sources including public records, local market MLS and general economic data.  The top 750 CBSAs as well as data down to the ZIP code level for approximately 18,000 ZIPs are available with a subscription to the service.  A trial subscription is available upon request.  

To learn more about Home Value Forecast or to see how Pro Teck and Collateral Analytics can help your company with its valuation needs, please call 800.886.4949 or email [email protected].  

Contact:
Domenica Puleo
781.314.1627
[email protected]

Or

Thomas Hoff
781.314.1669
[email protected]

SOURCE Pro Teck Valuation Services