“May home price trends confirm the recovery continues to mature,“ said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. “While there’s no questioning the validity of the recovery at this point, performances at the local level remained mixed when considering strength, sustainability and relative positions to 2006 prices. For example, Las Vegas’ strong yearly gains represent a rebound from a severe correction rather than bubble-like price growth. Despite 27 percent yearly growth, this market remains 53 percent below peak levels, significantly more depressed than most markets. Even if Las Vegas could parlay 27.0 percent annual growth, a highly unlikely outcome, it would take nearly four years for home prices to climb back up to high-rolling 2006 levels. On the other hand, some markets like Cleveland have yet to find a foothold in the recovery. Both Las Vegas and Cleveland are great reminders that granularity in home price trends remains key.
In general, national price trends are at a relatively healthy point and the diversity in price performance at the local level is mainly a function of the severity to which a particular housing market was hit during the housing crash. In general, we expect current gains to moderate over the near term. Certainly the expectation for moderation is less flashy than home prices racing their way back to pre-crisis levels. Yet moderation provides a sense of stability that is essential for both consumers and lenders, as it allows for both parties to calibrate to the current housing landscape.”
For more information, visit www.ClearCapital.com.
