All regions saw small upticks in yearly price gains but the front runner was San Francisco with 4.4% quarterly growth and 28.3% yearly growth. Close behind, Detroit home prices saw 4.3% and 23.3% in quarterly and yearly growth, respectively.
San Francisco median home prices are hovering at $600,000, while Detroit median home prices rest at just $107,500. The national median home price is $215,000. The data also shows that while San Francisco home prices are now just 28.2% off peak, those in Detroit are still down 64.5%.
Alex Villacorta, vice president of research and analytics at Clear Capital said that Detroit growth percentages are more easily swayed by gains than San Francisco. For example, to see 1% growth, median home prices in San Francisco would need to rise by $6,000, but in Detroit by just $1,075.
He also pointed out that while national and regional rates showed more of the same in September, an interesting dichotomy is unfolding beneath the surface. ‘Strong performances in San Francisco and Detroit remind us that in a dynamic market, the only constant is change. For about a year and a half now, we’ve been focused on first in, first out recoveries characterised by hard hit markets attracting investor interest, like Miami, Phoenix and Las Vegas. Now as the recovery matures, we see home buyers re-engaging in markets that haven’t fit the typical investor profile,’ explained Villacorta.
Detroit was arguably one of the hardest hit markets in the country and is finally seeing a recovery with 23.3% growth over the year, he said, adding that the city’s struggle with relatively high REO saturation over the last several years has delayed recovery.
‘Now, low price points and recent improvements in REO saturation, a key precursor to recovery, are driving gains in Detroit. On the other hand, San Francisco’s median home price at $600,000 suggests non investor home buyer demand is materialising, supported by its relatively strong local economy,’ said Villacorta.
‘As demand calibrates to local economic environments, markets will start to find their natural equilibriums with moderating gains ahead. This should invite new markets, such as San Francisco and Detroit to share the spotlight as their recoveries continue to evolve,’ he added.
